PEOPLE desperate for affordable housing could be driven into the arms of rogue or criminal landlords because of the Tory Government’s proposed tax changes, it has been claimed.
The changes, which are due to be debated at Westminster today, have been described as an “attack” on decent landlords which will badly affect the supply of affordable housing.
They could also lead to poorer maintenance of existing properties, according to the Scottish Association of Landlords (SAL), who are backing an SNP amendment to the Finance Bill.
The proposed changes to Mortgage Interest Relief (MIR) will see landlords taxed on their turnover rather than profit and SAL say this could push many landlords into a higher income tax bracket despite their income not having increased.
The Scottish landlords believe this could prevent them upgrading properties or investing in new homes.
“It is possible that the tax due in many cases could be higher than the landlord’s actual income, causing their businesses to go bankrupt, significantly reducing the number of homes available for rent and forcing an increase in rent levels,” said a SAL spokesperson. “This would disproportionately affect the supply of affordable housing in the private rented sector.”
The new clause to the Finance Bill will be debated at Westminster this afternoon.
An amendment submitted by the SNP shadow treasury team would require the UK Government to review the impact of changes to MIR on the availability of affordable housing.
“The changes to MIR are yet another attack on responsible landlords who provide essential housing across the UK,” said SAL chief executive John Blackwood. “The changes will mean landlords are taxed on their turnover, unlike every other business in the country which is taxed on profit. This will likely force a large number of landlords to sell, reducing much needed housing supply.
“The result will be increased costs for landlords and either a reduction in investment, an increase in rents or both. All of this at a time when governments in both London and Edinburgh acknowledge the vital role the private rented sector has in tackling the current housing crisis. We will work with our members to try and ensure vulnerable people do not suffer. Increased costs will inevitably impact most on those who cannot afford to see bills increase, potentially driving them in to the arms of rogue or criminal landlords who do not meet legal standards on safety or tenant security.
He added: “We welcome the amendment by Roger Mullin MP and urge the UK Government to accept it. Delaying the implementation of the MIR change until the study is complete will ensure that there is firm evidence available as to the likely impact it will have on the most vulnerable in our society.”
Roger Mullin, the SNP Treasury spokesman, is also to call today for a full UK Government review into Scottish Limited Partnerships (SLPs) – off-the-shelf firms marketed widely in eastern Europe as “zero-tax Scottish offshore companies”.
The call comes after revelations that Scottish-based firms are being used to launder profits from gun-running deals, vodka industry corruption in Ukraine and international diet pill scams.
Mullin, who represents Kirkcaldy, has already secured the backing of international aid charity Oxfam for his amendment to the Finance Bill amid widespread political concern that century-old legislation behind SLPs is being regularly abused.
The amendment calls on the UK Government to “undertake a review of the impact of the tax regime which applies to Scottish Limited Partnerships on levels of tax avoidance and evasion by such partnerships” and report back to both Commons and Lords on the issue within six months. Scottish ministers have already written to their UK counterparts expressing concerns over SLPs after it emerged last year they had been used in the alleged looting of £750 million from banks in Moldova.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here