A solution to short-term lets could see landlord tax reduced

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A solution to short-term lets could see landlord tax reduced Posted On 27 February 2024

Reversing the tax penalties placed on buy-to-let landlords in recent years would mitigate the negative impact of short-term rentals on communities

This is the assertion made by Ben Beadle, CEO of the National Residential Landlords Association. It comes in light of the Housing Secretary Michael Gove recently announcing that councils will be granted more control over future short-term rentals by making them subject to planning permission.

Meanwhile, a new required national registry will provide local authorities with the information they need regarding short-term rentals in their area, and the government advises this “will help councils understand the extent of short-term lets in their area, the effects on their communities, and underpin compliance with key health and safety regulations.”

Existing homeowners will essentially receive retroactive planning consent and will be permitted to rent out their primary or single house without planning permission, but only for up to 90 nights per year.

However, Beadle believes there is a method to increase buy-to-let rental availability while also lowering the impact of short-term rentals. He remarks: “These changes aer being introduced as a result of taxation changes which make it more attractive to rent a property in the holiday letting market rather than to a family in the private rented sector.

"The best way to control holiday lets is to reverse the damaging mortgage interest relief changes introduced back in 2015. These changes have served only to decrease supply, heighten demand and increase rents in the process."

To address the supply shortfall in the private leased sector, the NRLA has campaigned for revisions to the regulations governing vacation rentals. Currently, vacation rentals are taxed more favourably than privately leased houses, which the group considers unjust.

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