Finally.... the UK government has said something positive about landlords!
This month, Phillip Hammond announced that the government would be offering landlords who sell their properties to tenants who’ve been residing in them for three years or more a capital gains tax-break. I’m starting to think we may actually have an idea proposed by the government that will actually have the effect they’re desiring!
The help-to-buy scheme, like many others, only succeeded in increasing property prices and confusing the customers who opted-in. The ‘Good Landlord’ scheme may actually help everyone. In this article, I will hopefully explain why.
Let’s start with the landlords…. when they decide to sell one of their rental properties, they are currently liable to pay capital gains tax of 28% on any profits. Under the new scheme, if the landlord decides to sell to their sitting tenant, this 28% would be divided equally between the landlord and tenant – winner, winner!
How about the tenants? Well, as just stated, they’re in for 14% of any profits the landlord has made on the property. On average, this could be up to £7500 in the UK and nearly £20,000 in London. This would go a long way to helping first-time-buyers with their deposits or to go towards home improvements once they’ve moved in. With rental prices and the cost of living so high, tenants are finding it harder and harder to save for a deposit so this will be music to their ears! Tenants (and the landlord) will also benefit from a degree of security – tenants can make home improvements with less fear they will be booted out, and landlords can rest at ease knowing they’re property is more likely to be looked after.
Last but not least, we have the government and general taxpayer…. there would be immediate relief provided to the housing crisis as more homes would all of a sudden be sold to their sitting tenants meaning less demand for more homes to be built. There may be the slight issue of less capital gains tax but the money would be recuperated through the government having to provide less subsidies to developers. The general public would benefit from neighbouring properties being in better condition which may even increase the value of their property. Plus they wouldn’t have to write so many objections to planning applications!
I can only see positives in this proposal and it will help out in many different ways to many different people. Now let’s stop talking and let’s start acting!