End tax advantages for holiday-let landlords, says lobbying group

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Generation Rent has called on the government to ditch tax relief for holiday let landlords and also give councils the power to license holiday lets and impose council tax premiums.

The pressure group is urging Ministers to incentivise landlords to let to tenants rather than tourists in its report, Understanding the Impact of Holiday Homes on the Private Rented Sector, where it explains how the sector has been fuelled by a lack of regulation, tax advantages over residential lettings and a generally favourable tax system for the property sector.

It points to the nearly 300,000 holiday homes in Great Britain – about 6% of the private rented sector – two-thirds of which are classed for tax purposes as second homes and the remainder as commercial holiday lets.

Generation Rent wants the government to withdraw mortgage interest relief from furnished holiday lets, require all holiday lets to be registered for council tax and create powers for councils to levy council tax premiums on second homes and commercial holiday lets – something the Welsh government has already done for second homes.

More power

It hopes a registration scheme, similar to the one announced earlier this year in Scotland, could be set up by giving more power to local councils.

The report adds: “One way of reducing the number of properties becoming second homes is by making it harder to buy them, so increasing the stamp duty surcharge could make an impact in England.

One way of bringing second homes back into the residential market is to make it more costly to own one. A council tax premium is one of the few ways of raising these costs, and it would more efficiently target homes that are not being lived in than the stamp duty surcharge.”

Read more: The attractions of holiday lets for landlords.

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