Budget hits property landlords

Philip Hammond announced during today’s speech he would reform lettings relief so that it only applies in circumstances where the owner of the property is in shared occupancy with the tenant.

This reform will apply from April 2020 and the final period exemption will also be reduced from 18 months to nine months.

There will be no changes to the 36 months final period exemption available to disabled people or those in a care home.

Lettings relief can reduce the capital gains tax on the sale of a property which was at some point used as the taxpayer’s residence but which has since been let out as residential accommodation.

This is the latest in a number of tax hits which landlords have had to face from recent Budgets.

In April 2016 the government added a 3 percentage point stamp duty surcharge for private landlords and a year later removed tax relief on mortgage interest for higher rate tax payers.