Propertymark is calling for a comprehensive review of property taxation in today’s Budget.
It wants particular attention to the cumulative costs affecting private landlords.
Landlords need a fairer, more predictable tax system
The private rented sector provides homes for millions of households, but successive tax changes have affected the costs and risks associated with property investment. Restrictions on mortgage interest tax relief, higher Stamp Duty surcharges on additional properties and the costs of maintaining and improving homes all influence landlords’ decisions.
Propertymark wants a review of the cumulative tax burden on private landlords, including Income Tax, mortgage interest relief, Capital Gains Tax and additional-property Stamp Duty charges.
This should consider differences between individual and corporate ownership, the treatment of reinvestment and improvements, and the impact of taxation on landlords’ decisions to enter, remain in or leave the market.
A stable, proportionate tax system would give landlords greater confidence to invest and help protect the supply and choice of homes available to renters. The UK Government must consider the wider consequences of tax policy, rather than focusing on individual measures in isolation.
Stamp Duty and new property taxes must support a functioning market
Stamp Duty Land Tax in England and Northern Ireland can create a significant upfront cost for buyers, potentially discouraging people from moving, downsizing or finding a home that better suits their needs.
Propertymark wants to see a review of its rates and thresholds, including whether they have kept pace with average wages and house prices across the country.
It welcomes the announced Your First Home scheme, which aims to offer eligible buyers deposits as low as 2.5% on participating new-build properties. However, support must extend beyond new builds. Reducing upfront barriers for buyers of existing homes could help stimulate transactions and generate wider economic activity across the housing market.
The proposed High Value Council Tax Surcharge also highlights the need for a joined-up approach. With a planned threshold of £2 million for residential properties in England, the charge could affect households differently depending on regional property values and their ability to pay.
Propertymark wants the UK Government to consider regional disparities, household incomes, appropriate protections and how the surcharge interacts with existing property taxes.
Together, these measures should form part of a wider assessment of how taxation affects decisions to buy, sell, rent, invest and downsize.
Energy efficiency needs practical financial support
Propertymark supports improving the energy efficiency of the UK’s housing stock, but targets must be realistic, avoid a one-size-fits-all approach and be supported by practical financial assistance.
Retrofitting can require substantial upfront investment, particularly in older homes. Propertymark wants the UK Government to restore and expand tax incentives for energy-saving improvements, including the Landlord’s Energy Saving Allowance, and consider VAT relief on eligible works.
Clear information on grants, loans and other funding would help landlords and homeowners plan improvements, supporting energy efficiency ambitions without placing unnecessary pressure on the supply of rental accommodation.
Housing support must keep pace with rents
Propertymark continues to call for Local Housing Allowance rates to cover at least the cheapest 30% of local market rents, backed by an annual uprating guarantee.
When housing support falls behind rents, lower-income households face greater financial pressure and fewer options for suitable accommodation. Restoring rates to at least the 30th percentile and ensuring they keep pace with local rental markets would help tenants meet housing costs and support access to the private rented sector.
A long-term plan for property
The Autumn Budget is an opportunity for the UK Government to establish a more coherent approach to property taxation, rather than introduce further isolated changes without assessing their combined effects.
Propertymark hopes to see a commitment to a comprehensive, evidence-led review of the taxes and costs affecting property ownership, investment and occupation, particularly the cumulative impact on private landlords. This should include clear terms of reference, meaningful engagement with the sector and a published timetable.
A stable and proportionate tax framework would support investment, help people move when their circumstances change and provide a stronger foundation for improving housing supply, energy efficiency and affordability.
And the trade body ends its pre-Budget statement by saying: “The UK Government has recognised the value of reviews and commissions across other policy areas. Propertymark believes the housing sector deserves the same opportunity for a thorough assessment of the cumulative impact of taxation.
“As the UK Government sets out its Budget plans, Propertymark wants to see a clear commitment to understanding what the existing system is delivering, where it is creating barriers and how it can be improved. A comprehensive review would be an important first step towards a healthier housing market and better outcomes for homeowners, landlords and tenants.”
This article is taken from Landlord Today