Generation Rent defends landlord taxes

Ryan Bembridge

October 6, 2016

stamp duty

Tenant charity Generation Rent has defended the 3% stamp duty surcharge and the upcoming changes the mortgage tax relief.

On Tuesday the Royal Institution of Chartered Surveyors suggested that the 3% stamp duty surcharge should be abandoned.

Meanwhile Cherie Blair, the wife of former Prime Minister Tony Blair, fought HMRC in the Administrative Court today over the reduction in mortgage tax relief but lost the case.

Landlord confidence rebounds in Q3

Betsy Dillner, director of Generation Rent, said: “For too long the tax system favoured people who bought homes to make a profit over people who just wanted somewhere to live.

“The government’s recent tax changes should help to dampen speculation and give an advantage to people who have to date been shut out of the housing market.

“These are long-term measures whose success depends on house prices slowing down.”

RICS said there will be a 1.8 million shortfall in rental homes by 2025 which will be worsened by the surcharge putting off landlords.

But Dillner isn’t convinced. She added: “Warnings about the impact on the overall supply of private rented housing are premature, and clouded by the result of the EU Referendum.

“Despite the prospect of mortgage interest tax relief being phased out for landlords paying the higher rate of income tax, the number of purchases with a buy-to-let mortgage increased by 14% in the 12 months since George Osborne announced the policy in July 2015.

“And despite the introduction of the surcharge in April, and the subsequent dip in sales to landlords, stamp duty receipts increased in the second quarter of the year from £1.75bn to £1.98bn.

“As important as it is to dismantle the damaging culture of property speculation, tax is only one part of the solution to the housing crisis.

“We need to build more homes for low income households – and the tax reforms mean there’s a new source of revenue for this.

“We also need to improve protections for tenants whose lack of rights mean they face a high risk of eviction.”

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