The National Landlords Association (NLA) has warned that costs in the private rental sector (PRS) could increase by £2.6 billion if buy-to-let mortgage interest payments are made non tax-deductible.
In a letter to the Chancellor ahead of today’s Budget, NLA CEO Richard Lambert said that non tax-deductible mortgage interest payments would not be good for the UK economy and would put added pressure on the cost of housing.
The letter also detailed the influences of landlords on the UK economy through their support of the housing industry and direct contributions in the form of tax.
Lambert wrote: “It has been suggested that private landlords receive too many ‘perks’ or reliefs which give them an unfair advantage compared to owner-occupiers, but this ignores the fact that letting residential property for profit is a business.
“No business pays tax on their gross turnover alone so why should landlords be treated any differently? Removing their ability to deduct legitimate costs before declaring their taxable profit would essentially force them to suck up one of the most significant expenses they face in being able to provide homes for others.”
Using data from the Council of Mortgage Lenders (CML), the NLA predicts that costs in the PRS could grow by up to £2.6 billion if mortgage interest payments were reclassified as non tax-deductible. It believes that this would leave landlords with no other option than to increase rents.
Lambert concluded by pursuing “an unequivocal reassurance that the Government will continue to regard buy-to-let mortgage interest payments as a legitimate business cost and give landlords the confidence and certainty to invest for the future.”1
1 http://www.propertyreporter.co.uk/landlords/warning-issued-over-mortgage-interest-payments.html