Budget News: Landlords warned of painful times ahead

Landlord Expert
By Landlord Expert June 22, 2010 10:18

 

According to jml-insurance.co.uk, the prospect of higher capital gains tax (CGT) on second homes and rental properties is one concern, while a rise in VAT could increase costs across a number of areas, including letting and inventory agents’ fees, the renewal of equipment and refurbishment of bathrooms or kitchens.

Also to be taken into account are the knock-on effects of job losses resulting from the Budget.

Arrears generated from rising unemployment are already a major concern for landlords and can have particularly serious financial implications for buy-to-let investors with mortgages and those relying on rental income to help fund their retirement.

jml spokesman, Philip Suter, recommends insuring against arrears sasying: “If the effect of the budget is going to cause higher unemployment, even in the short term then property owners need to protect themselves.”

Finally, landlords have also been alerted to the fact that HM Revenue & Customs (HMRC) is taking a particular interest in property sellers, with a view to tracking down CGT evaders.

According to accountancy firm UHY Hacker Young, HMRC investigators raised £60 million in extra CGT in 2007/2008, while two years later they raised £74 million, representing an increase of 23%.

Landlord Expert
By Landlord Expert June 22, 2010 10:18

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