‘Accidental landlord’ armed services personnel who rent their homes out while deployed abroad or elsewhere in the UK are being hit by the Government’s tax hikes on private rented housing says a new study.
59% of married members of the armed services own their own home and rent them out when stationed away are subject to the same tax legislation as residential landlords.
Buy to let legislation has changed over the last few years, with the Royal United Services Institute, who carried out the survey, saying: “Taxation on rental income and recent changes to ‘buy-to-let’ legislation makes this increasingly financially difficult for service personnel.”
These changes include:
- taxing a landlord’s rental income, rather than their profits;
- reduced ability to reclaim the costs of wear and tear; and
- a phased reduction in mortgage interest relief to the basic rate.
Policy Director for the Residential Landlords Association, David Smith, said: “Today’s report is yet another indictment of the Government’s confused approach to the taxation of private rented housing which is leading to a loss of affordable homes.
“The country will rightly be angered that armed forces personnel wanting to rent property out whilst on active service are being hurt by this needless, ideologically driven assault on rental housing.
“Faced with a severe housing crisis we need a tax system that supports growth and encourages the provision of the new homes to rent we need to meet rising demand. It is time for the Treasury to think again.”
