The favourite to be named as the new Prime Minister and Conservative leader, Liz Truss, says there will be no new property taxes under her rule.
She has told a Tory party membership hustings event that she would prefer to slash taxes rather than introduce “handouts”.
There were no questions specifically related to housing but when questioned on her fiscal plans in general she said there would be “no new taxes” under her premiership and rejected short term taxation as a way out of the current inflation and cost of living crises.
On the prospect of soaring fuel bills and possible energy rationing, as some countries have announced, Truss argued that her administration would be “pro-business” and pursue policies such as reversing the current government’s recent national insurance rise.
She said: “I will be looking across the board to make sure we’re increasing supply and therefore dealing with the root cause of the issue rather than just putting a sticking plaster on. But I would absolutely be looking to act on business energy costs.”
Late last year the London School of Economics assessed that the taxation burdens on private rental landlords was heavier in the UK than in most of the other 15 countries it analysed, with more recent additions to it.
The LSE concluded that in recent years landlords had been hit by a series of tax changes which have been detrimental to profitability and returns on investment.
These include the decision to keep Capital Gains Tax for rented property at 28 per cent when it was reduced to 18 per cent for other assets; requiring landlords to pay CGT within 30 days of a sale; introducing a three per cent stamp duty surcharges on purchases on buy to let homes; and, for individual landlords, replacing marginal rate mortgage tax relief by a 20 per cent tax credit.
All of these changes were introduced under Conservative governments.
The LSE research concluded: “The UK now lies at one – the ungenerous - extreme of [the taxation] spectrum. For individual landlords, mortgage tax relief has been limited to a 20 per cent tax credit; limits have been placed on what can be claimed with respect to furniture and fittings and depreciation has never been allowed; and capital gains tax rates are higher than for other types of investment and has to be paid more quickly; and there is a supplementary three per cent on stamp duty for landlords and second home owners.”
The LSE then suggests: “Individually and cumulatively, the recent changes have reduced the incentive to be a landlord. Landlords are observing the effects of higher taxes on returns, but taxation is not the only official lever: they also cite increasing regulation and bureaucracy and, importantly, the government’s negative messaging about private landlords and their role in the housing market.”
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