Under proposals put to the Treasury by right wing think tank ‘Onward’, ahead of the budget later this month, private renters may get the chance to buy their home from landlords. Designed to help renters get on the property ladder, the new Help to Buy proposal also aims to increase votes for the Conservative party from those who are renting.
According to the paper published by Onward this week:
*Private landlords who sell their ‘buy-to-let’ property to a tenant who has lived in the home for three years or more would be exempt from paying capital gains tax on the sale. This is currently charged at 28% on second homes for taxpayers in the upper rate.
*The tax relief would be split equally between the landlord and tenant resulting in a big tax saving for the landlord and thousands of pounds towards a deposit for the tenant.
*Onward’s research estimates that more than 80,000 renting households would take up the tax relief each year. Ove the course of five years this would turn one million renters into homeowners.
Obviously proposals are just that, a proposal, so it will be interesting to see if anything is mentioned in the autumn budget on the 29th Oct.
The new Help to Buy proposal by Onward suggests the £1.3bn-a-year cost of the policy could be covered by curtailing other tax perks enjoyed by buy-to-let investors.