Landlords called for stamp duty rules to be reformed as part of the Budget to increase the supply of rental housing.
Property tax is charged in England and Northern Ireland and there is usually a 3% surcharge if the purchase of a new home means someone owns more than one home.
The National Residential Landlords Association (NRLA) wants Chancellor of the Exchequer Rishi Sunak to abolish the 3 percent levy on the purchase of rental properties if landlords invest in properties that increase the net supply of housing.
According to the NRLA, this would include creating new housing, converting large buildings into affordable housing, converting commercial properties into residential properties or repurposing one of the nearly 650,000 vacant homes in England.
The budget will be presented on March 3.
NRLA Executive Director Ben Beadle said: “A tax on the construction of new housing makes no sense at a time when we need more.”
“Supporting the growth of the private rental market, alongside all other forms of housing, would provide a significant boost to the economy amid the Covid-19 pandemic. Research published last year suggests that landlords are pumping over £3.5 billion into local businesses across the UK.”
The NRLA also said tax rules should encourage the provision of longer-term rental properties over short-term holiday lets. It claimed the current system had resulted in properties being taken off the long-term market and used for short-term holiday lets instead.
Mr Beadle continued: “Taxing long-term rental homes less favourably than holiday homes is simply bizarre. It completely undermines the Government’s efforts to encourage the provision of long-term, secure housing.”
“It is time for the government to recognise that its tax policy has led to a shortage of rental housing. This can only mean higher rents and less choice for tenants. This will not do much to achieve the goal of equalising living conditions.”
