In a further knock to landlords, the government has proposed abolishing the so-called ‘no fault’ Section 21 notices which give landlords the power to evict tenants at the end of their tenancy without a reason.
At the time, the National Landlords Association warned that any greater security for tenants would mean little if the homes to rent were not there in the first place.
Chris Norris, director of policy and practice at the NLA, said although an exodus of private landlords from the market could represent a windfall of sorts for the exchequer, he thought private property contributed far more to the UK economy when it was actively let than when it was disposed of as an asset.
He said: “Landlords’ taxable income from rent is generally taxed every year at 20 or 40 per cent depending on their income, whereas taxable gains are likely to attract only 18 or 28 per cent and are a one-off charge.
“In many cases, after an individual’s annual tax-free allowance, capital costs, and other deductibles are taken into account, it is likely that the tax raised by a typical property sale would be equivalent to only a year or two’s income tax.
“It would be far better for the government’s tax take to encourage landlords to keep trading, rather than sell up.”
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