In what may appear a surprise to almost everyone, the Generation Rent activist group has described yesterday’s Budget as a “giveaway to landlords.”
And it goes on to say the side-effect of the Budget is that it could “make thousands of renters homeless”.
Yesterday’s financial announcements – like to be the last ones by the government before an election – included confirmation that tax concessions for owners of furnished properties let out as holiday accommodation would end, in a bid to remove the incentive for landlords to offer short-term holiday lets rather than longer-term homes. This will take effect from April 2025.
To great surprise the higher rate of Capital Gains Tax was reduced from 28 to 24 per cent: this is a bid to encourage landlords and second homeowners to sell their properties, making more available for first time buyers.
However the Chancellor also abolished Multiple Dwellings Relief, although transactions with contracts that were exchanged on or before yesterday – March6 – will continue to benefit from the relief regardless of when they complete, as will any other purchases that are completed before June 1.
Generation Rent is angry because of the CGT change from 28 to 24 per cent.
Although the government says this is explicitly to encourage a wider supply of properties for first time buyers, Generation Rent’s chief executive Ben Twomey claims:
“This tax giveaway to landlords could make thousands of renters homeless. The only reason the Chancellor is doing this is because of the expectation that a lower tax rate will boost the number of sales, but apparently no thought has been given to the people living in those homes, who will generally face eviction before the landlords put them on the market.
“Landlords selling up is already one of the leading causes of homelessness, with 16,470 households made or being threatened with homelessness for that reason in the six months to September 2023.
“It is particularly counterproductive given that the government is currently legislating on measures to reduce evictions. If the government insists on going ahead with this cut, then renters will need better protection from eviction. Government could make the new rate conditional on selling with a sitting tenant, or even selling to the tenant, so that they aren’t forcing people out of their homes.”