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  • Tax

    Peers call for tax relief to improve rentals

    Landlords are welcoming calls today by a parliamentary committee for tax incentives for private landlords to improve the quality of their property.

    The recommendation is made by a House of Lords committee looking at the regeneration of seaside towns and communities.

    Following evidence provided by the Residential Landlords Association, the Committee’s report published today recommends: “the introduction of stronger incentives for private landlords to improve the quality and design of their properties.... This might include tax relief for making improvements to properties.”

    The RLA has long argued that the Government should use taxation more positively to support the vast majority of landlords who do a good job and seek to do the best for their tenants. This has included the RLA’s call to make tax deductible any work a landlord carries out that is recommended on an Energy Performance Certificate to improve the energy efficiency of rented homes.

    John Stewart, Policy Manager for the Residential Landlords Association, said:

    “We welcome the recognition this report gives to supporting landlords to invest in raising the standard of housing for their tenants. We call on the Government to accept this proposal.”

    SEE ALSO  -        ARLA: The health of the private rented sector

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    I think we should be pushing for all improvements to be allowable expenses - not just energy related ones.

    - the government will still be getting tax from improvements in the form of VAT on materials and the income tax from the trades carrying them out.

    ....and of course if we're allowed to expense it then that would be INSTEAD of it being an allowable CGT offset, so that makes the 'loss' to government even smaller if one takes a sufficiently long view.


    At the moment the government is plain greedy, wanting us to pay income tax on the income - then VAT on the expenditure too - plus the boost to the economy via income tax etc from the trades doing it... - then making us wait until we sell a property to offset those costs...

    ...whilst at the same time in government consultations on the matter going "oh well energy improvements will increase a properties value"(really ?) "so LL shouldn't moan about it"...

    Amazingly I need to eat today, and put fuel in my vehicle today - the possibility of waiting for a big payday when I'm nearly dead doesn't help - especially if the government want the sector to be more professional - to do that we need to continually re-invest in properties and not wait for 20-30 years to be able to offset that expense against our income.


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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.


    Plus the real value of CGT offsets is massively reduced by inflation!

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    Owen - I'd love to see property investors able to pay 5% VAT when they either bring a property into use, or even when they improve it to certain standards.  Why is it only new-build developers get to pay 5% VAT and we can create new homes too yet still pay 20%?

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    Over a year ago I had the ear of a Tory peer

    she was very intrested about the taxation of the PRS

    she fully understood the impact of s24

    but she said government were not listening to anyone and they were arrogant to any changes

    Mr Eric pickles summed up the rhetoric when he said Well you have five years to sort yourselves out before s24 has full effect

    the truth is government has better things to do than bother with this topic

    but it will haunt them in the years to come

    on radio two today there was a conversation about the conversion of office accommodation and how homeless from London were being housed in building that were not suitable for families


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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Its lucky Radio 2 haven't come across property guardians. There's a care home near you offering rooms for £64 per week, I've found a police station near me for £56 per week, or how about a council day centre in London for £81 per week.

    The PRS is a very broad spectrum and I suspect that awareness at the top levels is significantly narrower.

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    "Its lucky Radio 2 haven't come across property guardians." - I've been involved with Property Guardians for nearly 20 years, additional restrictions about who will be accepted are regulary implemented . Over that time the rents have risen noticably above inflation, and "space provided" (private living space, personal storage space,  communal areas) have reduced dramatically.

    Typical property guardian requirements : Age 21+  / In full-time employment or mature student / Non-smoker / No pets / No criminal record / Photo ID / Proof of address / Employment reference / Character reference / CRB check - list copied from https://www.propertyguardians.com/property-guardian/

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    I imagine the list would be quite extensive to avoid creating a tenancy. As a lodger landlord I have a good understanding of a licence to occupy and I have a fair understanding of a licence for services, but I am barely aware of the requirements for a licence for security.

    I've no idea what, if any, legislation exists to protect the licencees.

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    One of the major disadvantages for the guardian (= licencee) is the lack of security, the license can be terminated by the "landlord" (property owner or management company) at any time, typically with only 4 weeks notice for the guardian to vacate. Notice is often triggered once the owner finds a potenital buyer for the empty property.

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