Rishi Sunak has unveiled key pledges for landlords and first-time buyers as part of the upcoming Conservative Party manifesto. Sunak’s proposals include a 100% capital gains tax relief for landlords who sell properties to their tenants, a move he describes as “transformational.”
Sunak promises to abolish stamp duty for first-time buyers on properties valued up to £425,000 and to launch a revamped Help to Buy scheme. During a BBC interview, Sunak admitted that owning a home has become more difficult for many. In his manifesto, he outlines plans to eliminate stamp duty up to £425,000 permanently, which had temporarily benefited over 200,000 first-time buyers in one year.
The new Help to Buy scheme aims to assist first-time buyers by offering an equity loan of up to 20% for new-build homes and providing a 5% deposit on affordable terms.
What’s more, Sunak proposes tax incentives for landlords who sell properties to their current tenants, offering full relief on capital gains tax to encourage such sales. Mark Beaton, Ellisons Solicitors, said:
“The announcement in the Conservative Party manifesto that landlords will receive 100% relief for capital gains tax liability on the sale of a property to an existing tenant will be welcomed by landlords. The high cost of buying a property has resulted in the number of renters rising since 2003 and rental properties have been more in demand as some landlords have been reducing their portfolios and thereby reducing the overall supply.
Over the last few years many landlords have felt under pressure following the requirement to pay a higher rate of stamp duty land tax for the purchase of an additional property, introduced in 2016. They have had to endure the pandemic during which some tenants were not in a position to pay all of their rent and the ability to evict was suspended and more recently they have faced the prospect of the introduction of legislation to bring to an end no fault evictions (this has been abandoned due to the General Election).
Landlords have been feeling vulnerable.
The proposed tax break (if it can be implemented) may help to start to address the position although the number of tenants who will be in a position to buy the property that they are renting, or who will want to do so, may be limited.”
OECD statistics show that the UK’s tax burden is at a historic high, with tax comprising 35.3% of GDP in 2022/23 and projected to rise. The Conservatives have pledged not to increase income tax, national insurance, or VAT, and to raise the income tax personal allowance for pensioners.
One Response
I am quite worried about this country’s obsession with buying houses.
Certainly there are some that would be financially better off paying a mortgage rather than rent however a lot of that is due to the sky high rents that desperately need to come down.
There are still people out there that do not want to own a house or who will be unlikely to ever afford a house where renting is the only option. Further, we should want people to invest in property and keep money and investments in this Country. One of the things that the cost of living crisis affected desperately was people’s pensions. People are only just getting by and I fear in years to come, the lack of savings going into pensions is going to cause serious problems. Property provides a pension for people and security in retirement.
We need to encourage more renting and as such we need more landlords and more rental properties to drive rents down. Providing tax breaks for landlords to sell to tenants does not do that. Getting rid of the ludicrous second home owners stamp duty and bringing in tax breaks for interest on mortgages will encourage landlords to buy. That will itself spur on the housing industry by providing another category of buyers. At present we do not have enough buyers for the level of properties on the market hence the stagnation. Encouraging more buyers to buy will kick start the market.
The obsession with the hatred of Landlord’s is fuelled by media reports of awful tenancies. Whilst I agree there are bad landlord’s out there, there are some very good one’s as well. Sadly it seems that government policy is based on playing up to the media rather than thinking what is in everyone’s interests.