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Truss Pledges No New Property Taxes

Truss Pledges No New Property Taxes

The favourite to be named as the new Prime Minister and Conservative leader, Liz Truss, says there will be no new property taxes under her rule.

She has told a Tory party membership hustings event that she would prefer to slash taxes rather than introduce “handouts”. 

There were no questions specifically related to housing but when questioned on her fiscal plans in general she said there would be “no new taxes” under her premiership and rejected short term taxation as a way out of the current inflation and cost of living crises.

On the prospect of soaring fuel bills and possible energy rationing, as some countries have announced, Truss argued that her administration would be “pro-business” and pursue policies such as reversing the current government’s recent national insurance rise. 

She said: “I will be looking across the board to make sure we’re increasing supply and therefore dealing with the root cause of the issue rather than just putting a sticking plaster on. But I would absolutely be looking to act on business energy costs.” 

Late last year the London School of Economics assessed that the taxation burdens on private rental landlords was heavier in the UK than in most of the other 15 countries it analysed, with more recent additions to it.

The LSE concluded that in recent years landlords had been hit by a series of tax changes which have been detrimental to profitability and returns on investment. 

These include the decision to keep Capital Gains Tax for rented property at 28 per cent when it was reduced to 18 per cent for other assets; requiring landlords to pay CGT within 30 days of a sale; introducing a three per cent stamp duty surcharges on purchases on buy to let homes; and, for individual landlords, replacing marginal rate mortgage tax relief by a 20 per cent tax credit.

All of these changes were introduced under Conservative governments.

The LSE research concluded: “The UK now lies at one – the ungenerous – extreme of [the taxation] spectrum. For individual landlords, mortgage tax relief has been limited to a 20 per cent tax credit; limits have been placed on what can be claimed with respect to furniture and fittings and depreciation has never been allowed; and capital gains tax rates are higher than for other types of investment and has to be paid more quickly; and there is a supplementary three per cent on stamp duty for landlords and second home owners.”

The LSE then suggests: “Individually and cumulatively, the recent changes have reduced the incentive to be a landlord.  Landlords are observing the effects of higher taxes on returns, but taxation is not the only official lever: they also cite increasing regulation and bureaucracy and, importantly, the government’s negative messaging about private landlords and their role in the housing market.”

Liz Truss unveils Simon Clarke as the new housing secretary

Simon Clarke has been appointed as the new housing secretary as part of the Liz Truss’s new cabinet.

The MP for Middlesbrough South and East Cleveland was widely expected to be given the job.

He has been an MP since 2017 and yesterday he tweeted: “Delivering on Levelling Up for communities in all parts of our country, unlocking the homes we need and supporting the economic growth that is so central to @trussliz’s Government is our mission – will give it my all.

“This is a department that I know really well, and which I am so looking forward to returning to – the commitment and expertise of officials there on themes as diverse as homelessness, building safety and devolution is second to none.”

Liz Truss unveils Simon Clarke as the new housing secretary

 

Whether the Rental Reform Bill will go ahead

There is no indication yet whether the Rental Reform Bill will go ahead, be amended or get binned.

Ben Beadle, the chief executive of the National Residential Landlords’ Association, said: “The NRLA welcomes Simon Clarke’s appointment as Housing Secretary.

“The new Minister will need urgently to address the rental housing supply crisis.

“Damaging tax hikes and uncertainty over reforms to the private rented sector are leading many landlords to leave the market when demand for rented homes remains high.

“All this is doing is increasing rents, making it more difficult for those wanting to become homeowners.”

Look afresh at the rental reform White Paper

He added: “The Government needs to look afresh at the rental reform White Paper to ensure the plans in it have the confidence of responsible landlords.

“This needs to include action to tackle anti-social tenants, scrapping plans that would damage the student housing market, and reforming the courts to ensure legitimate possession cases are dealt with more swiftly.”

The chief executive of the British Property Federation, Melanie Leech, said: “He will play a critical role in the Prime Minister’s plans to ‘deliver, deliver, deliver’, with levelling up, housing supply and carbon reduction all vital to the UK’s future prosperity and global competitiveness.

“We stand ready to work with the Secretary of State to unlock billions of pounds of property investment that will transform places across the UK, and we urge him to take decisive action quickly, the clock is ticking.”


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