Scottish landlords take tax case to Treasury

Scottish landlords met with senior UK government officials in London yesterday to urge them to rethink planned tax changes for private landlords.

Representatives from the Scottish Association of Landlords (SAL) told officials in the Treasury officials that changes announced in the Budget in July risk threatening investment in the Private Rented Sector (PRS) at a time when Scotland is facing a long-term housing crisis.

In his Budget statement, Chancellor George Osborne has proposed reducing tax relief on buy-to-let mortgages and replacing the current “wear and tear” depreciation allowance for items such as furniture.

The SAL believes that these changes will significantly increase costs and result in reduced investment and upgrading of properties, or some landlords exiting the market altogether.

Together with the Residential Landlords Association (RLA) the organisation launched an e-petition which attracted over 20,000 signatures last month.

The petition drew a response from the government which maintains the move will affect fewer than one in five landlords, that residential property is a passive investment like shareholding, and that the interest relief is unfair as it is not available to homeowners.

However, the RLA and SAL assert that the move will affect many more landlords and tenants than claimed, forcing up rents, cutting supply and damaging the PRS.

Speaking before the meeting in London, Scottish Association of Landlords chief executive, John Blackwood, said: “Even the numbers put forward by the Treasury, which claim only 1 in 5 landlords will be affected by the tax changes, represents a huge swathe of the sector. We believe, when taking the changes to ‘wear and tear’ in to account, the actual number will be a lot higher.

“We have heard just last week in the press from a landlord in Edinburgh about how these tax changes will make it harder for families on benefits to find accommodation in the private sector, increasing demand on council housing which is already over-subscribed across Scotland.

“Both SAL and our members are in favour of ensuring the highest possible standards in the sector and are working with the Scottish Government to achieve that but these measures could see landlords forced to pass at least some of the burden on to tenants in the shape of increased rent which they don’t want to do.”