In a letter to George Osborne, the National Landlords Association warns that rents will increase if landlord tax breaks are scrapped in upcoming Budget. The National Landlords Association have sent a letter to Chancellor George Osborne ahead of today’s Budget, warning that landlords would be forced to raise rents if tax breaks are swept away.
They say that costs in the private rented sector could increase by as much as £2.6 billion if mortgage interest payments for the buy-to-let sector were to be reclassified as non-deductible.
NLA CEO Richard Lambert argued that residential landlords are operating a business, and that since businesses do not pay tax on gross turnover, it would be grossly unfair to force landlords to do so.
Shelter and Generation Rent claim that tax breaks for landlords, which they portray as some special benefit that applies only to them, are somehow â€œunjustifiable.â€
The letter highlights the contributions to the economy that landlords make; by supporting the housing industry, providing flexible accommodation which enables a dynamic workforce, and direct contributions in the form of tax.
Because profitability averages around 5%, squeezing landlords’ already slim margins would force them to recoup their costs by increasing rents, which would in turn put greater pressure on the spending power of tenants and damage the economy.