9:02 AM, 5th February 2021, About 6 months ago 55
“Calling for long term-rental property to be taxed more favourably than short-term holiday lets is clearly not the same as saying they should be taxed the same. After all how could you favour one over the other if they were taxed the same?”
“A clear example is the proposal the NRLA put out in its press release- whilst the stamp duty levy would apply to the provision of new homes to rent adding to the overall supply of housing, it would continue to apply to those investing in new holiday lets. The NRLA also believes that the Chancellor should look at the way the sector is taxed in the round to ensure it has an advantage over short term holiday lets given the pressing need for long term rental properties. As Ben notes in his quote it is the impact of tax policies as a whole that are causing such supply problems. “
The NRLA press release says it: “Wants to ensure the tax system encourages the provision of longer-term rental property over short-term holiday lets. From April this year, the final phase of reducing mortgage interest relief for landlords to the basic rate of income tax will be completed. This measure does not apply though to furnished holiday lets. This has encouraged the removal of properties from the long-term market for use as short-term holiday lets.”
Ben Beadle, Chief Executive of the National Residential Landlords Association comments:
“To be taxing long term homes to rent less favourably than holiday lets is simply bizarre. It completely undermines efforts by the Government to encourage the provision of long term, secure housing.
“It is time for the Government to realise that its tax policies have created a shortage of rented housing. This can only mean higher rents and reduced choice for renters. This is not going to do much for the levelling up agenda.”
The National Residential Landlords Association is also calling on the Chancellor to scrap the 3% stamp duty levy on the purchase of homes to rent where landlords invest in properties that add to the net supply of housing. This would include developing new housing, converting large properties into affordable units, changing the use of a property from commercial to residential or bringing one of the almost 650,000 empty homes in England back into use.
This comes as the Royal Institution of Chartered Surveyors has concluded that rents will rise because of demand for properties increasing, whilst new instructions from landlords continue to “dwindle.”
Property website, Rightmove revealed that outside London asking rents increased in the fourth quarter for 2020 for the first time since 2011, leading to a record average of £972 a month. It warns that in the suburbs, towns and villages, available housing is lower than normal for this time of year, whilst demand is higher.
Ben Beadle said:
“To have a tax on developing new housing is completely nonsensical at a time when more is needed. Supporting growth in the private rental market, alongside all other housing types, would provide a significant boost to the economy in the midst of the COVID-19 pandemic. Research published last year suggests that landlords inject over £3.5 billion into local businesses across the UK.”
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