Chancellor 'must ensure buy to let landlords not driven from market by CGT hikes'

18 June 2010

Written by Simon Whittaker

The chancellor of the exchequer George Osborne must ensure that any increases in capital gains tax (CGT) do not encourage buy to let landlords to leave the market, one organisation has said.

Ahead of the presentation of the government's first budget next week, the Association of Residential Letting Agents (ARLA) has called for dealings within the private rented sector to be categorised as "entrepreneurial business activity".

The body believes that housing supply will decline should the tax rises apply to portfolio investors, as existing landlords will seek to sell their property and prospective ones will be discouraged from entering the market.

"Landlords play a vitally important role in providing affordable housing in the UK," Ian Potter, operations manager of the organisation, commented, adding that the application of duty increases would "put further strain on an already struggling market and will result in fewer people being able to put a roof over their heads".

ARLA would like to see a tapering of the tax rises for landlords, while the government must ensure that punitive measures are not imposed when a portfolio investor sells one property to buy another.

Also campaigning for an exemption of the private rented sector from CGT hikes, chairman of the National Landlords Association David Salusbury has called for further consultation with the industry before any decisions are made.

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