Good idea to tax ‘rich landlords’ harder say activists
Renters’ Reform Coalition backs Budget’s property taxes despite warnings that it will tighten supply and force up rents.
The decision to add 2% to landlords’ income tax bills and the introduction of a Mansion Tax in Rachel Reeves’ Autumn Budget have been given a warm welcome by tenant activist groups, even though industry insiders have warned it could dry up supply in the rental market and push record rents even higher.
Tom Darling, Director at The Renters’ Reform Coalition (RRC), said: “Soaring rents are a major cause of homelessness, driving renters out of their homes or into poverty, and refusing to increase housing allowance means many families will remain trapped in emergency homelessness accommodation, unable to afford to move.
It’s only right that those with the broadest shoulders – which in England usually means those who own multiple properties – should bear more of the load.”
“We welcome tax changes like the Mansion Tax and increasing taxes on property income. It’s only right that those with the broadest shoulders – which in England usually means those who own multiple properties – should bear more of the load. Landlords should be taxed at the same rate as their tenants, who work to pay the rent.”
Autumn budgetSystem has been rigged against renters.”
Ben Twomey, Chief Executive of Generation Rent, does not believe the changes in the Budget will increase rents: “For too long, the tax system has been rigged against renters. It’s scandalous that landlords pay less tax on their incomes than their tenants, especially as HMRC figures show that 59 per cent of landlords don’t have a mortgage to pay.
“Meanwhile, landlords with mortgages are already charging as much as their tenants can bear, so will struggle to push them any higher.”
necessary correction
And, according to renters’ rights group, Acorn, landlords have benefited from favourable treatment for years, and it argues that the shift in tax policy is therefore a necessary correction.
“Soaring rents are a major cause of homelessness” says young Darling. Yes, but his own Renters Reform Coalition are a major cause of soaring rents. Yesterday I sent out two tenancy renewals with higher rent rises than I would otherwise have done, thanks to discriminatory tax on landlords, especially S.24.
There is little new in young people thinking it is difficult to buy their first property. Previous generations have had to save for a deposit and then compromise on location, or property condition. What is new is the feeling of entitlement and its weaponisation to attack the very people who are doing most to supply housing. Activists don’t provide homes. Even more alarming is the government’s disposition to listen uncritically to the demanding Darlings and Twomeys in Generation Rent, RRC etc and ignore those of us who work in the property sector.
Generation Rent’s outrage that “landlords pay less tax than tenants” is a lie that has been pushed on several occasions leading up to the budget, by their Leftist think tank friends at the Resolution Foundation. Well, if you are going to lie, why not make it a big one. Landlords pay far more tax than any other occupation, since Osborne’s notorious budget 10 years ago. The Chancellor repeated this lie on her feet last week in the Commons “a landlord with income of £25,000 will pay nearly 1,200 less tax than their tenant.” Or has she quietly dropped the regressive Section 24 which puts landlords on uniquely high rates, the more so if they provide housing where it is most needed and therefore the interest cost is higher?
Of HM Treasury’s team of 7 ministers, 2 are ex-staff of the Resolution Foundation. That bodes ill for tenants. Here is a story that journalists should be looking into. The press have torn into the Chancellor’s distortion of the fiscal deficit. Why do they not also shed some light on the way that our key industry of housing is now driven by entitled 20-something activists with contempt for private property and by blatant lies about the already discriminatory tax paid by landlords. Who actually thinks that rental housing will be plentiful and affordable in 2026, under this dysfunctional business-illiterate regime?