Love them or loathe them, in less than two weeks the UK will have a new Tory Prime Minister, and with both Boris Johnson and Jeremy Hunt have promised to shake up the UK's tax system, it is Stamp Duty that comes top of buy to let landlords' wishlist for reform.
Could the next government be friendly to buy to let landlords?
Unless you've been living under a cloud, you'll know that successive Conservative-led governments since 2010 has had it in for the small-time landlord. From tax allowances to tenancy fees and second home Stamp Duty, the tax increases and new regulations have arrived with alarming regularity. All of this was done in the name of increasing home ownership, taking no account of the fact that most young people prefer new-build, whereas many landlords choose to take the refurb to rent option.
According to new research from MT Finance, some 97% of buy to let property investors think the government is not doing enough to support them, especially as many of their measures have harmed the small-time landlord without touching the larger corporate operators. Of those questioned, 50% said removal of second home Stamp Duty on buy to let properties would be a good place to start.
50% of residential investors still vote Conservative
The survey also revealed that 17% of residential property investors would support a tiered tax system specifically for landlords, which would effectively replace standard income tax on rental income. Perhaps surprisingly, 50% of buy to let landlords also said they planned to vote Tory at the next election, which is perhaps surprising as their love for the Conservatives has never appeared to be mutual.
Whether any of these ideas are carried through by our new Prime Minister remains to be seen. Brexit will almost certainly dominate the legislative agenda for the first few months and, with a working majority of just two votes (including DUP support), it remains to be seen how long the government will last, or how much it can achieve.
Buy to let is still a good investment prospect for landlords
From my point of view, it should be steady as she goes when it comes to buy to let investing. The costs of new taxes and regulation are relatively transparent, so if you do your sums and go in with your eyes open, there's still money to be made. Also remember that refurb to rent will allow you to create equity in your property, enhancing your rental yield and providing a cushion against fluctuating property prices.