With an election on the horizon, the recent 2010 Budget was always going to have plenty of political significance, but what did Chancellor Alastair Darling have in it for landlords and property investors? Not a lot according to the National Landlords Association (NLA).

The organisation believes only two policy statements appear to be of direct relevance.

The Broad Rental Market Areas (BRMA) used to calculate rates of LHA are to be adjusted to exclude the most expensive properties. This is likely to exert downward pressure on the top rates of LHA in some areas.

From April 2011 a new 5 percent rate of Stamp Duty Land Tax (SDLT) is to be introduced for property transactions above £1 million. This is likely to apply to individual property transactions and portfolio acquisitions meaning that landlords making bulk purchases will face considerably higher tax bills.

In the lead up to the Budget Statement the NLA lobbied HM-Treasury on five key issues.

1. Capital Gains Tax (CGT): Landlords should be entitled to utilise ‘roll-over’ relief to encourage reinvestment of released capital gains. The current exclusion of residential property from access to this relief discourages landlords from reinvesting and from long term business planning. Released gains could also be used for renovating and modernising housing stock.
2. Stamp Duty Land Tax (SDLT): The ‘slab system’, whereby tax is calculated according to fixed rates in arbitrary price bands, should be immediately reformed. Unlike most taxes, SDLT is neither regressive nor progressive and leads to inevitable distortions in property prices. In addition, where landlords make multiple transactions, each property should be treated individually for the purposes of Stamp Duty and not, as in the current system, as one bulk transaction.
3. Value Added Tax (VAT): The VAT rate for renovations and home improvements should be reduced to the lowest possible rate of 5 percent. Social landlords already benefit from significant funding provisions in order to meet targets for the provision of decent homes. Cost barriers should be removed which discourage landlord s from modernising housing stock.
4. Council Tax: The way in which Council Tax is assessed for multi-occupancy dwellings varies greatly across the country. It causes unnecessary uncertainty among landlords and often leads to a failure to maximise affordable and much-needed accommodation. The NLA is calling for immediate Government clarification to ensure consistency across local authorities.
5. ‘Rent-a-Room’ Scheme: The tax-free threshold for homeowners taking in lodgers should be extended from £4,250 to £9,000 per year in order to keep up with current rental prices. The NLA fully supports the Spareroom.co.uk ‘Raise the Roof’ Campaign which argues that the prospect of completing a tax return has become a major disincentive to homeowners who could provide much needed accommodation.

The NLA says that although it may not have been entirely successful on these counts, it will continue to press HM-Treasury on these issues and looks forward to making positive progress with the new Government following the general election – whichever party, or parties are in power.

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