PRIVATE landlords fear that new income tax arrangements proposed for rental property could destabilise the sector. The Guernsey Private Residential Landlords’ Association described new proposals as ‘ill-conceived’ - even though the Treasury and Resources Department deferred a decision on how tax on property would be treated, as part of the zero-10 changes, to allow it to investigate the issue more carefully.
Association chairman Clive Maides, right, said that forum members were concerned about the impact on individual landlords and the whole sector.
‘We feel the Income Tax Authority proposals are ill-conceived, especially after the general acceptance of the ‘2004′ Parr report by the States,’ he said.
‘The Housing Department has always maintained that the private landlords’ sector is an essential balance to the island’s housing and social needs.
‘The Parr report noted that over a two-year period, the PRS number of units had fallen and further commented that the market was already somewhat fragile.’
Mr Maides said that the sector mainly comprised small landlords, who owned between one and four units to let.
‘Many have acquired the property as a form of pension plan. The proposed removal of some allowances from 2008 will have a detrimental effect on both current and future landlords and may diminish the number of units available in the future.’
He also feared that discouraging private landlords could hamper the Housing Department’s drive to ensure that only those truly in need got a States house.
It is proposed that repairs allowances for furnished and unfurnished property are reduced from 35 to 15% and 25 to 10% respectively.
Mr Maides said that both were very low and might mean more claims for the excess repairs allowance, which would mean more administrative work for Income Tax.
‘This is defeating the object of simplifying the system.’
It is feared that tax due on rental property could rise by as much as 20%, which could be enough to discourage landlords out of the sector or force them to increase rents to maintain returns.
Mr Maides believed there would inevitably be a reduction in the number of private properties available at the level of rent which ex-States tenants required.
Article posted on 7th July, 2007 - 12.00am
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