Budget 2013 and buy to let landlords

Buy to let landlords have found little to gain from Chancellor George Osborne’s tax neutral Budget 2013.

Osborne made clear that he was giving and taking from the same pot and no extra money was available to cut taxes or pay for extra benefits or allowances.

He did not talk about property tax in his Budget speech – but he has stopped tinkering with stamp duty and capital gains tax on prime property.

The main income and corporation tax changes affect landlords as much as any other taxpayer:

– Buy to let and HMO landlords can earn £10,000 tax free from April 6, 2014

– Property companies will pay corporation tax rate at 20% from April 1, 2015

The new employment allowance may offer an extra tax relief to property owners.

Tax saving opportunity

The measure is aimed at encouraging small businesses to take on new employees by offering a £2,000 refund of employer national insurance contributions.

Property businesses should qualify for the relief – providing the employee is not a joint owner of any property in the business.

HMO and buy to let owners have long been able to put their spouses, partners or family on the payroll if they are not co-owners of the properties.

From April 6, 2014, they should be able to take on new employees and claim the employment allowance.

Landlords should note that the allowance applies to creating new jobs – and does not apply to existing employees, so hold off kicking that teenager off their games console for a while yet.

After the budget, HM Revenue & Customs restated their intention to raise more lost tax from tracking down buy to let and second home owners who fail to declare rental profits or gains from selling investment property.


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