Lettings boss slams HM Treasury over unfair landlord tax take
Greg Tsuman of Martyn Gerrard says taxes on interest payments is forcing landlords to increase rents.
The Treasury has been accused by the President of ARLA Propertymark of biting the hand that feeds it by forcing most UK landlords pay tax on mortgage interest payments.
Greg Tsuman, Director of Lettings at London-based Martyn Gerrard Estate Agents and President of ARLA Propertymark, made the claims after the release of the ONS’ Changes in private rental sector behaviour report.
PRICES HAVE RISEN
The report analyses the extent to which rents across the UK have increased year-on-year over a three-month rolling period and shows that prices have risen 9.7% on average in England and 9.9% in London.
Prices in the capital have risen for just over three-quarters (77%) of privately rented properties revisited in September 2023 and for 63% on average across the UK.
But Tsuman believes that the Treasury is ‘eating the golden goose’ as Section 24 of the Finance Act 2015, which forces landlords to pay taxes on interest payments, is playing a major role in rising rent costs which in turn is forcing landlords to increase rents.
He says: “The rental market is clearly in the depths of a crisis and it is under immense pressure from multiple fronts. The main issue is that the Treasury seems to be overlooking the fact that it is eating the golden goose with the current tax structure imposed on private landlords.”
TAXES ON TURNOVER
He adds: “Section 24 of the Finance Act has forced landlords to pay taxes on turnover rather than just profit, meaning they are being taxed on interest payments, which have gone up from 0.1% to 5.25%.”
And he adds: “We need to urgently review the tax regime for private landlords and reintroduce mortgage interest relief by scrapping Section 24.
“Simply put, I suspect the Treasury would be raising considerably more revenue from the buy-to-let sector if it hadn’t forced this mass exodus of private landlords, resulting in fewer paying taxes.
“We need to be bringing landlords back to the market, not forcing them out, so that we have a competitive market that keeps rents low.”
