Tax breaks for longer tenancies may be in the next budget - Maras
The government may be about to give tax breaks to landlords agreeing to longer tenancies, according to claims put forward in The Sunday Times.
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Tax breaks for longer tenancies may be in the next budget

The government may be about to give tax breaks to landlords agreeing to longer tenancies, according to claims put forward in The Sunday Times.

 

 

The paper said: “Under plans that have found favour in Downing Street, landlords would not pay capital gains tax when selling to tenants who have lived in a property for three years or more.

 

 

“The plan is designed to spur landlords to offer longer tenancies and then to sell on to a new generation of homeowners.

 

 

“Senior Tories say the plan — due to be unveiled by Conservative think tank Onward — is under consideration for inclusion in the budget on October 29.”

 

 

Under existing rules, landlords who sell a rental property are liable to pay CGT at 28 per cent on any profits they make.

 

 

Under the Onward plan the landlord would be eligible for tax relief with the profit split equally with the tenant, who could use it as part of their mortgage deposit.

 

 

Just last week the Residential Landlords’ Association, in its submission to the Treasury ahead of the Budget, called for tax relief on rental income which could increase each year a tenancy continues up to a maximum of five years if the tenancy is renewed.

 

 

Research by the RLA found that 73 per cent of landlords would offer longer tenancies in return for financial incentives and the ability to swiftly regain possession if tenants fail to pay their rent or commit anti-social behaviour.

 

 

Over the summer the government proposed a number of options to implement a three year tenancy model addressing the demand for longer tenancies from the growing numbers of families and older people in the private rented market.

 

 

One of these options proposes ‘financial incentives’, which the government argues “could be quicker to implement” than mandatory three year agreements.

 

 

One of these options proposes ‘financial incentives’, which the government argues “could be quicker to implement” than mandatory three year agreements.