The Budget yesterday saw a campaign win for Generation Rent as the Chancellor finally acted on our calls to remove tax breaks from holiday lets.
But we got all of two minutes to celebrate because Jeremy Hunt then announced a cut to capital gains tax:
“both the Treasury and the OBR have looked at the costs associated with our current levels of capital gains tax on property and concluded that if we reduced the higher 28% rate that exists for residential property, we would in fact increase revenues because there would be more transactions … today I will reduce the higher rate of property capital gains tax from 28% to 24%”
That “more transactions” is the big problem. When landlords sell, they normally evict the tenants. Many of us have experienced this – and in just six months last year, 16,470 households were made homeless or faced homelessness as a result of their landlord selling up.
This move by the Chancellor will only push the number of homeless families higher – at a time when his colleague the Housing Secretary is trying to pass legislation that will reduce evictions.
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.
We have written a letter to the Chancellor to set all this out and urge him to take steps to protect tenants who face yet more uncertainty in the months ahead.
