The Institute of Economic Affairs (IEA) is critical of government unfairly penalising landlords, reported Landlord Today on the 8th of May.
As a swingeing new tax regime begins to hit landlords harder and harder, by 2021 some of those who have invested in private sector buy to let properties may be facing taxes of more than 100% on their earnings, claims the IEA’s latest report.
The report warns that such an approach to taxation not only unfairly discriminates against landlords, but is likely to force rent levels to rise, reduce the supply of accommodation in the private rental sector, and defies any rational economic rationale.
Calling for an end to such unfair discrimination and the setting of a level playing field for landlords and homeowners the report suggests that the entire system for raising taxes on residential property is thoroughly reviewed and overhauled.
As more and more responsible and law-abiding landlords are forced out of the private rented sector, says the IEA, their places may be filled by unscrupulous and less reputable property investors.
The IEA’s report takes exception to the government’s apparent targeting of landlord through increased Stamp Duty and a tax regime which is closing down their avenues for gaining tax relief on essential finance costs.
A situation in which landlords are losing more than 100% of their slender profits in tax is a contradiction of any semblance of sound tax policy, say the authors, who insist that those who have currently invested in buy to let property are unfairly discriminated against.