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Tax hikes is incentivising the use of homes as ‘short-term holiday lets’

A growing number of buy-to-let landlords are letting out their homes as short-term holiday lets, making them no longer available for long-term renting following the introduction of a raft of ‘anti-landlord’ policies.

The introduction of the 3% stamp duty surcharge, the abolishment of the 10% ‘wear and tear’ tax allowance, and the fact that mortgage tax relief is currently being phased out, have prompted concern that there could be a net reduction of long-term private rented properties next year, as landlords look for other ways to boost income levels, including the use of homes as short-term holiday lets.

“With the tax changes incentivising the use of homes as short-term holiday lets it is tenants who will suffer as fewer properties are available for them rent for the long-term,” said RLA vice-chair and director for Wales, Douglas Haig,


“The government wants longer term security for tenants, especially families, and landlords support this, but they need to change their tax policy to achieve it,” he added.

Haig’s comments come after fresh research undertaken by the RLA’s research lab, PEARL, analysed property listings in Cardiff and found that the number of Airbnb listings in the city have increased by a staggering 259% year-on-year.

This suggests that almost one in five homes to rent in Cardiff is now being offered through holiday websites such as Airbnb.

The study revealed that of those landlords now offering short-term lets, more than a third were doing so because of tax increases on landlords.

One landlord who has made the move to holiday lets commented: “I didn’t want to do this, but the tax changes have forced me down this route.

“Selling is not an option due to capital gains tax, and this iniquitous tax which is effectively retrospective is unjust in that my buy to lets are a business, just like any other. There will be less properties available to rent as a result of this tax.”

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