UK Scottish landlords to meet Treasury officials over tax plans

Scottish landlords to meet Treasury officials over tax plans

Scottish Association of Landlords
Scottish Association of Landlords

Scottish landlords are due to meet with senior UK Treasury officials in London to urge them to rethink planned tax changes for the sector.

The Scottish Association of Landlords (SAL) said proposals such as cutting tax relief on buy-to-let mortgages could “significantly” increase costs.

It is also challenging plans to replace the “wear and tear” depreciation allowance for items such as furniture.

SAL warned investment in the private rented sector could be threatened.

It also said the proposals could see some landlords “exiting the market altogether”.

The Treasury said it kept all taxes under review and “regularly engages with relevant stakeholders as part of the tax policy-making process”.

The proposed tax changes were outlined in Chancellor George Osborne’s summer Budget.

The UK government’s proposals include restricting tax relief which landlords can claim on property finance costs to the basic rate of income tax.

It maintains that the move will ensure landlords with the largest incomes will no longer benefit from higher rates of tax relief.

In a statement, SAL said: “Even the numbers put forward by the Treasury, which claim only one in five landlords will be affected by the tax changes, represents a huge swathe of the sector.

“We believe, when taking the changes to ‘wear and tear’ into account, the actual number will be a lot higher.

“We have heard just last week in the press from a landlord in Edinburgh about how these tax changes will make it harder for families on benefits to find accommodation in the private sector, increasing demand on council housing which is already over-subscribed across Scotland.”

It added: “Both SAL and our members are in favour of ensuring the highest possible standards in the sector and are working with the Scottish government to achieve that, but these measures could see landlords forced to pass at least some of the burden on to tenants in the shape of increased rent which they don’t want to do.”

Scottish landlords are awaiting the outcome of a recent consultation by the Scottish government, which could see a major overhaul of legislation in the private rented sector.

Proposals include scrapping the current “no-fault” repossession clause that allows landlords to reclaim their property simply because a fixed rental term has ended.

There are also plans to protect tenants against rent hikes by enabling them to take “unjustified” rent rises to arbitration.

Specific measures may also be introduced to combat “excessive increases” in hot-spot areas such as Aberdeen and the Lothians.

Final proposals will be included in a Bill to be laid before the Scottish Parliament this autumn.

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