Armed service personnel renting their properties out whilst serving overseas and other locations are being targeted by the Government tax hikes on private rented housing.
As noted by the RUSI (Royal United Services Institute) in a recent report, 59% of military personnel with spouses own their own property and for those who rent their properties out when they are posted elsewhere, taxation on rental income and recent changes to buy-to-let legislation makes this increasingly financially difficult for service personnel.
In the RUSI’s paper, concerning obligations and choices for service personnel and families, outlines that many older service personnel prefer to provide a geographically stable home for their families. Those who choose this, either decide to rent or buy a family home and then either travel daily to their post or take up Ministry of Defence (MoD) Single Living Accommodation (SLA) during the five-day week. The exact number of people doing this is unknown but reflected in the 76% who take up MoD accommodation and the 59% of military personnel with spouses who own their own home.
Tax increases introduced over the period of two years include taxing landlord’s rental income, instead of their profits, a phased reduction in mortgage interest relief to the basic rate and lessened ability to reclaim the costs of wear and tear.
David Smith, Policy Director for the Residential Landlords Association, states: “Today’s report is yet another indictment of the Government’s confused approach to the taxation of private rented housing which is leading to a loss of affordable homes.
“The country will rightly be angered that armed forces personnel wanting to rent property out whilst on active service are being hurt by this needless, ideologically driven assault on rental housing.
“Faced with a severe housing crisis we need a tax system that supports growth and encourages the provision of the new homes to rent we need to meet rising demand. It is time for the Treasury to think again.”
Written by Renee Simone Wells.