Tax Grab - rental sector may not be viable warns Propertymark

The chief executive of Propertymark has made an outspoken attack on the government in response to its latest attempt to extract still higher taxes from the rental sector.

Nathan Emerson says it’s “unacceptable” that there’s “constant aim being taken” at the sector.

His comments follow government leaks over the weekend which were published in The Sunday Times. The paper said that the Budget on Wednesday will contain what it called a £300m “tax raid” on the rental sector. 

Specifically it said: “The Chancellor [Jeremy Hunt] is to launch £300m tax raid on second home owners who make money from holiday lets in an attempt to make the [income tax cut] sums add up. He will abolish a series of tax perks for landlords who rent out their properties to short-term holidaymakers rather than long-term tenants.

“Although it represents another tax grab by the Conservatives, Hunt will argue it will help tackle the housing shortage in coastal areas and holiday hotspots such as Cornwall and the Lake District, where landlords are converting to holiday lets to benefits from generous tax perks, depriving local people of housing.”

In response, Emerson now says: “Propertymark are extremely concerned to see reports within the news of a rumoured £300m attack on landlords within the budget, all at a time when many have already left the sector and many more are just about holding on.

“Just like traditional homeowners, inflation and interest rates have hit landlords with force and there needs to be recognition from the UK government that to provide high quality homes, whether they be short term lets or longer-term housing, the system must be workable.

“It is unacceptable there is constant aim being taking at landlords to the point the viability of the entire system is becoming seriously questionable for both existing landlords and future investors.”

The Budget proposal has already won criticism from the National Residential Landlords Association

“The Chancellor needs to address the chronic shortage of long-term rentals by attracting new landlords to the market. Squeezing holiday lets is not the answer. He should follow the advice of the Institute for Fiscal Studies and reverse punitive tax hikes which have stifled the supply of the homes renters desperately need” says chief executive Ben Beadle.

“Scrapping the stamp duty levy on the purchase of additional homes would see almost 900,000 new long-term homes to rent made available over the next 10 years. This would lead to a £10 billion boost to Treasury revenue as a result of increased income and corporation tax receipts.”