Tax hike for local landlords means rent risesPosted: May 12, 2017
At a hustings for June’s General Election this week, local landlords expressed their worries about the government’s changes to Mortgage Interest Relief (MIR) and how this will affect the income they earn from their properties. Taxed on their turnover from April this year, instead of their profit, many of them will find themselves pushed into a higher tax bracket.
Also, in a report carried out by the Residential Landlords Association (RLA) in 2016, the majority of landlords (71 per cent), said that the changes would have a negative impact on their rental income. At least 68 per cent of them reported that as a result, their profits would be down by at least 20 per cent, that’s a fifth of their rental income. But worryingly, these measures particularly discriminate against UK based landlords in favour of those from overseas for whom the tax changes will not apply. Large property companies too will find bearing the cost of the increases far easier than small scale, local landlords some of whom could be priced out of the market. The availability of affordable properties to rent could be drastically reduced, adding to the already serious lack of suitable housing in Portsmouth, and across the country, for the vast majority of people who need it.
Portsmouth’s Labour candidates both shared their concerns about these issues:
Stephen Morgan (Portsmouth South) says:
‘Portsmouth’s housing needs are not being met. There have been far too many luxury flats and houses being built in the city, homes which are beyond the reach of the people who need them most. The city needs more affordable housing, rentable properties that are within people’s means. The government’s changes to MIR flies in the face of this and will only make matters worse.’
Rumal Khan (Portsmouth North) added:
‘I am a landlord myself, I know just what these changes will mean for people like me and for the people we rent to. There are already landlords in Portsmouth who have evicted tenants and are selling up because of the Tory Government’s policy. It’s not an option to become a company and ‘incorporate’ as some have suggested, it’s too expensive.
‘Once more the government are hitting small business owners. They say they are the party for business, but they’re only interested in big business, only global multi-nationals. Small business owners, who feed the local economy and are part of the community, don’t seem to matter to them.’