Tenant campaign group Generation Rent has claimed that private landlords are enjoying subsidies worth more than £1,000 per family.
The groups says that tax breaks, housing benefit and “loopholes that enable landlords to avoid paying capital gains tax” add up to £26.7bn in benefits and this equates to £1,011 for each of the UK’s 26.4m households. It says this is “enough to buy a top of the range HD TV, a week’s family holiday to Majorca or a Chris Boardman bike”.
Generation Rent also calculated that landlords, who house 4.75m households in the UK, earn £77.7bn per year: £42.3bn in rent and £35.4bn in rising house prices. This is more than Morocco’s GDP of £68.6bn (for a country of 33m people), making the UK’s private rented sector the 61st largest economy in the world.
Generation Rent is calling for an additional landlord levy of 22% on rental income.
It said the proposed “landlord tax” would:
- Raise an additional £9.3bn per year, assuming an industry turnover of £42.3bn.
- Fund the building of approximately 90,000 new council homes, which would ease the demand for private rented housing, lower rents and help reduce the UK’s housing benefit bill.
- Reduce the economic advantage that landlords have over would-be home owners in the property market.
- Reduce the burden of landlord benefits on the wider public.
- Make it relatively harder to make a living by owning property than by working.
Generation Rent said the government is providing equity finance worth £1bn to property developers to build homes for private rent. It also complained that landlords also don’t have to pay business rates.
“Even if they were to pay only £1,000 in business rates for each property – the average retailer pays £12,750 – that would bring the exchequer £4.75bn,” said a statement from the group, “Finally, HM Revenue and Customs estimates that £550m in tax on rental income is evaded by landlords each year.”
Through income tax and capital gains tax, Generation Rent estimates that landlords pay £8.9bn, but even accounting for that it still leaves an overall “subsidy” of £17.8bn.
Generation Rent director Alex Hilton said: “While renters have borne the brunt of austerity, landlords have enjoyed their own little economy the size of Morocco’s supported by subsidies from the UK taxpayer that could be better used fixing the housing crisis.
“Because they can gamble on an asset bubble while claiming all the tax advantages of running a business it’s no wonder landlords are piling their savings into the property market. Meanwhile, people who just want to buy a place to live are at a disadvantage against buy-to-let investors when they bid for property as they simply cannot compete with someone who can write interest off against tax.
“It’s time landlords started paying more of their fair share so first time buyers could have a level playing field and the government could have the resources to build more social housing.”
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Comments
these and shelter are competing for the prize of bigot of the year.
Left wing whingers who don`t like/understand capitalism. Landlords take a risk by borrowing money to make money. Why is that so objectionable to GR? Landlords certainly assist local authorities with the ever-present housing crisis. The crisis was caused by Gordon Brown & A Darling who failed to control the banks via the FSA (the FSA was Browns personal idea & it failed catastrophically) Now banks are ultra cautious to lend to perfectly solvent applicants who want to buy. Labour caused the shit we are in, Britain is technically bankrupt, Brown sold most of our gold at a stupid price to fund his insane left wing ideas. it was Labour who came up PFI`s which are now crippling councils & health authorities..how anybody with a brain could even consider voting Labour in May is beyond me.
This landlord bought his buy to let property just before the crash in 2007. 8 years on it is still worth less than it is now mortgaged for, it has cost between £1k and £3k per year (gross) more than income, with no change until I get below ~80% LTV. Tax offsets are piling up with no way to cash them in until I start making a profit. I'm the reality of a significant chunk of the landlords Generation rent talk about!
Peter
Are these people stupid?!
The vast majority of landlords are not rich fat cats. The proposed landlord tax will just drive people out of the PRS and leave millions of tenants with nowhere to live.
And what if the landlord does make a profit? Chances are they will spend that money in the shops boosting the economy and therefore keeping many people in job.
Generation Rent you do not have a clue!
Do GR not get it that the only people providing homes, risking their finances, at the moment is the private sector!
Introducing more legislation will yet again cause the rents to go up as someone has to be paid to do the extra work.
Agreed more homes need to be built, new ways of getting them built need to be worked out. What happened to Housing Associations when the idea was that people would get together to build homes and belong to the association? What about crowd funding, or developing new schemes to get the homes up quickly?
It has always been problematic for new generations to start their first home, and each has to think up appropriate ways. Using decent landlords as the whipping dog is not even touching on the issue and will make matters worse for the majority(80%)of reasonably happy landlord /tenant partnerships, through raised rents to cover the additional costs.
Just how much profit does the average new rental property bring in. None much if there are any repairs to be done. GR should be working on how to get more homes built, with advice from all the related Associations, rather than spouting destructive nonsense, which will discourage brave investors. Get a grip and make a difference.
nationwide funds this "charity" seems like a labor front
Shame they didn't campaign for a tax refund when property values dived during the recession and a lot of landlords went bust.
But then I forget...it's the poor tenants who bear the brunt of.... pretty much everything these days.
Not at all biased then.