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UK - One of the most hostile tax regimes for landlords in the world?

UK - One of the most hostile tax regimes for landlords in the world?

Recent tax changes caused the RLA to describe the taxation of landlords as 'one of the most hostile tax regimes in the world". After analysis of a number of similar countries we can confirm the truth of this assertion...


Australia"s housing market is similar to ours, prices in major cities have risen such that 1st-time buyers find it impossible to buy a house. Yet Australian landlords can deduct mortgage interest and other costs from their rental income and also, they have the option to 'negatively gear" their property investment meaning they can offset losses against other income including from employment.

When they sell, Australian investors receive a 50% reduction on the capital gains tax (CGT) payable as long as they have owned the property for 12 months. This contrasts with the UK where CGT is higher than for investors selling other assets. Similar concessions apply in New Zealand, where negative gearing is allowed and there is no CGT at all for most property transactions.

The US is not quite so generous, but landlords can offset rental losses under certain circumstances and any losses not offset can be used to reduce taxes at time of sale. In Canada, landlords can deduct interest expenses, mortgage fees and the cost of maintaining and managing their properties from their income but like the UK losses cannot be offset against other income. Canadians also benefit from a 50% CGT reduction when time comes to sell.

In Germany, where most people are renters, landlords are also treated favourably. Mortgage interest is deductible, rental losses can be claimed against other income and there is no CGT on property owned for 10 or more years.

This confirms the accuracy of the RLA statement and we are right to feel hard done by, but given the current political climate, things are unlikely to change soon.


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Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.

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