Private landlords escaped another tax hammering in Chancellor Phillip Hammond’s Autumn Budget 2017.
After years of misery, landlords have little to fear – or cheer – from his 62-minute speech to MPs in the House of Commons.
Hammond’s predecessor George Osborne has changed the profitability of renting put property for tens of thousands of landlords by slashing mortgage interest tax relief.
The main property thrusts of the Budget were abolishing stamp duty on house purchases for first time buyers and grand plans to build 300,000 new homes a year by 2025, including five new garden cities.
Axing stamp duty will save the average first time buyer £1,660 on a home purchase.
Key Budget 2017 points for landlords
Here’s a digest of the main points that impact on landlords:
- Local councils will have the power to levy a 100% Council tax premium on empty investment properties – Communities Secretary Sajid Javid will announce the details, but empty is unlikely to mean voids between tenancies. The measure is aimed at long-term empty homes.
- Limited companies will lose indexation relief against capital gains from January 2018, bringing the tax companies pay into line with individuals and partnerships.
- The Communities Secretary will also launch a consultation aimed at collecting opinions from property professionals and landlords about offering tenants longer tenancies. However, many landlords cannot offer more than 12-month tenancies due to restrictions imposed by mortgage lenders.
- Tenants claiming Universal Credit will keep their housing benefit for two weeks after making a claim to ensure they have the cash to pay their rents. The seven-day waiting period for new claims is also abolished.
- A change in how to claim travel expenses is just the ticket for non-corporate landlords renting homes.
- The next Finance Bill will confirm unincorporated property businesses can claim flat rate travel expenses by car, motorcycle or van for business journeys from April 6, 2017.
- Income tax allowances and thresholds go up. From April 2018, landlords can earn £11,800 a year before paying income tax, while the threshold for 40% tax rises to £46,350. This change gives landlord spouses a chance to review how they own their rental homes as they can earn a combined £92,700 a year before paying higher rate taxes.