Landlords should be recognised as 'running a business'

6th March 2012

The government should begin to apply the same tax policies to landlords as they currently do to businesses that reinvest in the private sector, according to the Association of Residential Letting Agents' Budget submission.

Calling for letting property to be recognised as an entrepreneurial venture, the report has been released in a bid to influence George Osborne's next budget, set for March 21st.

Essentially, the recommendation is for landlords to receive the same tax relief presently granted to small companies that reinvest in their portfolios.

This would mean that businesspeople who operate in renting markets would avoid tax bills of up to 28 per cent, as such costs can hinder their ability to reinvest and lead to stunted growth in availability of rented properties.   

ARLA's suggestion is based on the perceived need to encourage and facilitate further development in the private rental sector, and the measures are designed to lead to an overall improvement in living conditions for tenants. 

With 3.4 million people in Britain currently occupying privately rented accommodation, the aim is provide investors with more incentives as a means to cope with increasing demand for such living arrangements.

By recognising a landlord's portfolio as a business ARLA believe that the government can help boost the economic recovery throughout the UK.

Given the report, businesspeople considering investment in everything from flats in smaller towns to more upmarket media city apartments in Manchester could benefit should the government take the organisation's advice, as reinvestment would become a far less expensive process.

Ian Potter, operations manager at ARLA, said: "Landlords must be treated as the entrepreneurial businesses they have now become."

As the private rental sector grows and demand among tenants increases, recognising a landlord's assets as a business could help improve growth and widen the scope for investors looking to benefit from the market.