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Cut landlord tax breaks, urges homeless charity

26 June 2015

Homeless charity Shelter has slammed government policy to allow private landlords to write off billions of pounds of property expenses.

The charity claims the £14 billion landlords set off against income tax would be better spent on providing more homes.

Chief executive Campbell Robb also urged the government to reconsider the tax status of landlords while cutting welfare benefits to the tenants who live in private rented homes.

HMRC allows buy to let landlords to claim business expenses in the same way as builders, retailers and other businesses.

The expenses are set off against rental profits to calculate a net rental profit, which is the amount a landlord pays tax against.

HMRC figures show that in 2012-13 landlords claimed –

• £6.35 billion in relief against mortgage and loan interest
• £3 billion for repairing homes they rented out
• £1.62 billion for fees paid to letting agents, lawyers and other professionals
• £1.49 billion for costs like travel, accreditation, adverting and running an office
• £1.4 billion for service charges, ground rent and insurance
• £492 million against costs of services paid by landlords on behalf of tenants, such as cleaning and gardening

“In the context of looming welfare cuts and a dramatic shortage of homes, all those struggling to keep up with sky-high housing costs will be shocked to hear that a massive £14 billion has been given in tax breaks for landlords in just a year,” said Robb

“A fraction of this amount would go a long way towards fixing our housing shortage and giving millions of priced-out families and young people the chance of a stable home.

“The government must start to set out a comprehensive plan that will finally build the homes this country desperately needs. An urgent review of these huge tax breaks must be part of this.”

Richard Lambert, of the National Landlords Association, said: “Landlords are required to pay tax on the profit they make and, like any other business, are entitled to offset their costs incurred from the day-to-day running of the property against tax. They don’t receive any special subsidies compared with other businesses.