A senior Conservative peer has accused the former Chancellor, George Osborne, of exacerbating the housing crisis through his tax hikes for landlords.
Conservative Peer Attacks Tax Hikes for Landlords
Lord Flight, who previously served as the Shadow Chief Secretary to the Treasury, has written an article on the Residential Landlords Association (RLA) website to warn all those in the sector that tax hikes for landlords will “drive up rents” and “drive out investment in the sector”, at a time when 1.8m new homes to rent are needed by 2025.
Lord Flight referred specifically to decisions to tax landlords on their income rather than profit and the higher rate of Stamp Duty on additional homes.
In his article, Lord Flight highlights evidence from the London School of Economics that challenges the previous Government’s claims that landlords are buying homes that first time buyers could have purchased. He also points out statements by the Institute for Fiscal Studies that landlords are taxed more heavily than homeowners.
The peer calls on landlords to lobby their local MPs, informing them of the damaging impact that the tax changes will have on the supply of affordable homes to rent, and encourage them to seek changes in the new Chancellor’s Autumn Statement on 23rd November.
Recently, the Society of Licensed Conveyancers called on the Chancellor, Philip Hammond, to scrap Osborne’s Stamp Duty reforms in next month’s Autumn Statement.
Commenting on Lord Flight’s article, the Chairman of the RLA, Alan Ward, says: “Lord Flight’s analysis is correct. When we need almost two million more homes to rent by 2025, recent tax changes will choke off investment, increase rents and make it more difficult for tenants to save for a home of their own.
“The new Chancellor has an important opportunity next month to correct the previous Government’s changes to the way the rented sector is taxed. We call on him to seize this opportunity with both hands.”
Worryingly, landlords have revealed that the changes to mortgage interest tax relief are most likely to discourage them from investing further in the property market.
Which tax hikes for landlords are you most concerned about?