A high profile figure in the private rental sector has given a simple message to Chancellor Rachel Reeves as she ponders the contents of next week’s financial statement – don’t slam more taxes on landlords.
David Alexander, chief executive of DJ Alexander – the largest lettings and estate agency in Scotland – has written in The Scotsman newspaper that Reeves is facing growing demands for spending while at the same time having already presided over one of the highest UK tax regimes in recent history.
He suggests she may be tempted to claim as landlords and investors are not, in her opinion, “working people” they can be taxed more heavily – something which wouldn’t break her broad manifesto commitment not to impose more fiscal burden on “working people.”
Alexander dismisses this by stating: “Any additional costs imposed would, obviously, have to be passed on to the tenants so while this may seem like a winning policy in terms of the optics of targeting landlords, the reality is that those people who actually depend on the private rented sector to provide their home would be the ones paying the higher taxes.”
In addition, he says such a route could backfire anyway: “The problem the government has is that landlords and property investors can simply exit the market. They may have projections which show that by adding VAT or introducing a landlord income tax this will produce a quantifiable annual levy based on current incomes, but this does not allow for behavioural change as a result of higher taxes.”
Reeves’ spending review statement – next Wednesday lunchtime – will, in her words, “scrutinise every single pound the government spends” and will cover day-to-day departmental budgets over the next three years and investment budgets over the next four.
Reeves says she will not borrow for day-to-day government spending and will not raise taxes further on “working people”.
Some £40 billion of tax increases were announced in last autumn’s Budget and the changes to the way borrowing for investment is accounted for means an extra £300 billion will be available for infrastructure projects in the coming years. Despite this, speculation is growing that additional taxes of some kind will be announced on Wednesday.
Alexander concludes his Scotsman article by saying: “At a time when demand is unprecedented, when tenants are facing delays in finding appropriate homes, and when property investment is being put on hold due to uncertainty over future returns this is not the time to make the market more difficult for landlords.”
You can read the whole piece here: https://www.scotsman.com/business/landlords-are-not-an-easy-target-for-rachel-reeves-tax-rises-5160318
This article is taken from Landlord Today