An activist group is demanding that the lower Capital Gains Tax should apply only to landlords who sell with sitting tenants.
In this week’s Budget it was announced that property higher level CGT would drop from 28 to 24 per cent. This was explicitly stated by Chancellor Jeremy Hunt as an incentive for landlords to sell, freeing up properties for first time or other buyers.
However the Generation Rent group is complaining about the move, claiming it will promote homelessness.
It’s now written to Hunt asking him to allow the CGT only to those landlords who sell with tenants in situ.
Indeed, Generation Rent describes the move as “utterly thoughtless”.
A blog on its website says: “An utterly thoughtless move by the Treasury, and counterproductive, especially given how damaging homelessness is for local government finances.
“It might bring in more tax revenue, but tenants will pay the price in stress and upheaval, raiding savings to pay for an unwanted move.
“Landlords selling up doesn’t have to result in their tenants losing their homes. Some tenants might be able to buy their landlord out, while many homes sold by landlords are bought by landlords, so it is senseless for tenants to be evicted by default.”
The letter to the Chancellor - from Generation Rent chief executive Ben Twomey - reads:
Dear Chancellor,
I was dismayed to hear your announcement as part of your Budget to cut the rate of Capital Gains Tax on residential property disposals, which Generation Rent believes will fuel homelessness.
You stated that this measure would “increase revenues because there would be more transactions”. I urge you to consider the impact that higher sales volumes by landlords will have on the tenants of their properties.
In most cases, a landlord selling a property will evict the tenant in order to sell the property vacant, using Section 21 of the 1988 Housing Act.
Tenants in these situations will have two months to move out and it can be very difficult to find a new place to live in that time, especially when you had no intention of moving, rents have risen in your local area, and you are not financially well-prepared.
In many cases these will be aspirant first-time buyers who must dip into their savings to cover the cost of a removal van, cleaning, and rent on two places at once, setting their dreams back.
Landlords selling properties is a leading cause of homelessness, with 16,470 households made homeless or threatened with homelessness in the six months to 30 September 2023.
An increase in property sales will only increase this figure, putting a greater burden on local authorities which are already struggling to discharge their homelessness responsibilities.
To mitigate this, I hope you will consider making the lower rate of Capital Gains Tax conditional on the property being sold with a sitting tenant, with a renewed tenancy that prevented a Section 21 eviction in future, or being sold to the tenant. This would make sure that no one lost their home for the sake of a lower tax bill for landlords and a modest boost to the Exchequer.
I am disappointed to be writing this letter as we welcome wholeheartedly your other major announcement on property tax: the abolition of the furnished holiday lets scheme, which we and our supporters have been campaigning for since the rapid growth of holiday lets during the pandemic.
I would welcome an opportunity to discuss this with you and your officials in more detail.
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Maybe GR should have a chat with the Scottish Government re rent caps before winging about CGT! They have both caused more damage to the PRS than anything else.
Landlords = easy targets.
Go do the hard work!
Tenants usually can’t afford to buy the home they rent!
GenRent has been demanding LLs leave the sector - suddenly they seem to have realised when we do there will be no homes for tenants!
100% Correct Tricia..
I know 🫣 it’s a bit funny 😂
We complain about everything you do. Then we complain your selling up. If I become insane and wanted to please Generation rent LTD. PLC. It would be really difficult to know where to start.
Blatant discrimination against landlords who house the most financially challenged tenants.
Of my 16 BTLs only one household may earn enough to be able to buy the property they currently rent. The likelihood of them wanting to buy that property is about zero as it doesn't have a garden.
The rest are either HMOs occupied by students or young professionals or small flats and houses occupied by UC tenants. Most years at least two of my HMO tenants will buy houses but they certainly couldn't buy the HMO they're living in.
They are always spouting an enormous rise in homelessness figures due to landlords actions, whatever they may be - but those homes don’t disappear - either someone buys them or someone else rents them, reducing the overall homelessness figure again. Basic Maths.
But… most tenants are that way for a reason, they cannot afford to buy 🤔 so yes that house they are evicted from gets sold to someone who can afford it, what happens to that tenant who cannot buy it 🤷♂️ They are hunting in a rental market of diminishing numbers…. Rents go up 💰😱
Correct Nic unless the houses go somewhere else? Always new blood coming through in the form of kids growing up but the elephant in the room is the new blood coming in on inflatable boats is distorting the picture too.
What agonising cognitive dissonance they must be suffering when they (almost) have to admit that landlords really are selling up, and it is really bad for renters.
I wonder if numbers coming from "the other side" regarding landlords selling up will convince the government any more than numbers from landlord organisations and property industry representatives.
Silly remark about it increasing homelessness. Somebody will buy the previously let property and make it their home so it balances out.
Well I would imagine the financial loss from selling with tenants would be much greater than the small gain in CGT at 24% rather than 28%, so still much better to sell with vacant possession.
This lot score own goal after own goal. As we all know, it's the likes of this mob and their lobbying that was behind the exodus of landlords over to holiday lets in the first place. In my view those landlords who left the long term rent sector because of the tax regime and other compliance issues are unlikely to go back. In particular holiday lets don't require EPCs, so why would a landlord with a D or lower go back and face a Labour government who will likely reintroduce the delayed Tory EPC policy for long term rents. The way forward to entice landlords back would have been to drop S24, but of course that would not bring in revenue. Also, what effect will this have on the tourist industry? Fewer holiday lets = higher prices and less people staycationing.
Not to mention the unemployment factor so more people on handouts..
Definitely not going back until things change. The money from my two sales so far is sitting happily in the bank earning over 5,,,%. One is housing my hardworking son at zero rent. I'm afraid I'm not going to risk everything I've worked for to house the very people the Government should be housing...The concerns I had at evicting people is now just anger at the way we've been treated by the Government. Charity begins at home. I wouldn't even attempt to try and sell with a tenant in situ, what an absolute joke.
GENERATION HATE have hit the nail on the head with a nuclear warhead yet again.
Will the landlords who wish to buy properties with a sitting tenant for life with a fixed rent that is only optional to pay please form an orderly queue
Yet again these fanatics prove that their stupidity is only exceeded by their prejudice and hatred
I tried to sell a property with a tenant in, I also offered it to the tenant. After 6 months I had only one silly offer, so I took it off the market and raised the rent instead.
Best way John increase the rent to make all the hassle worth while
No buyers will be interested with tenants in situ. Some topics are only used to kill time, this is one of them.
I'm all for this. As long as the tenants buy at market value... No estate agent fees, guaranteed sale and only 10% CGT? Bring it on!!!
If capital gains tax was shared between Hmrc and the tenant (as a deposit) it might help more tenants buy the property they currently live in. It might help 1 out of our 6 (soon to be 5) tenant families.
Just shut up and build some houses for those in need...leave the PRS for people who need short term, flexible accomodation. Problem solved.
I agree 100%
Coming your way is lots of people from Gaza, courtesy of the unelected Cameron. And of course Biden who is going to build a port to facilitate this, Lebanon type situation coming to Britain soon.
Not in my properties they're not
Nor in my properties! 😡
If PRS become a gold mine for everyone which is misconception, then we are close to doomsday. In case our Generation of Dummies don't understand, this means that PRS has very limited profit or some are making a loss, the way that everyone wants to have a cut from the PRS demonstrates that all of us lose the direction in economy. 25% of the traders will disappear...Then Shelter and Generation of Dummies will have to attack someone else to keep the employment.
Nope, Tenants won’t be buying if they are sharers, which one of them will able to buy the wrong property which is what shared property is for individuals, so you think it took 5 to pay the Rent how can one buy this type of property and maybe not in the final area where want to live.
On the other hand if they are a family they are not going to buy even if they could, they are not going to loose their housing Benefits. I don’t know any family Renting that are paying for themselves.
Generation Rent ‘should prove there is a net benefit to tenants before voicing more (stupid) opinions’
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