The Government is being called upon to take new steps to combat the shortage of home in the UK by giving landowners and developers incentives to increase supply.
This includes building more affordable homes through the introduction of temporary capital taxation reliefs.
Proposal
The new proposal has been forwarded by London-based chartered accountants Blick Rothenberg LLP and follows a warning from RICS over the shortage of homes to rent.
Frank Nash, partner at Blick Rothenberg, commented: ‘RICS are pushing to loosen tax rules on the buy-to-let market and go even further by suggesting pension fund could be engaged to provide large scale housing schemes. This added pressure puts the Government in a difficult position given their pledge to ensure younger generations become owner-occupiers rather than renters.’[1]
‘We could use the tax system to boost the supply of affordable housing by temporarily reducing capital gains tax, corporation tax and stamp duty land tax on development land where affordable housing quota is met. House builders and landowners are motivated to achieve competitive returns and tax savings would incentivise them to work with local authorities and meet their affordable housing targets without degrading the competitive returns provided through private house sales,’ he added.[1]
Government urged to scrap tax to boost supply
Support
In the week that the Government said it would assist in the construction of additional homes for people to buy, Mr Nash added: ‘There are too many prospective homeowners chasing too few properties and competing with the private rental sector.’[1]
‘Temporary tax exemptions on the disposal of land for housing should inject a new supply dimension into the housing market, but these reliefs should be conditional upon achieving a minimum percentage of affordable homes within a give time frame, in line with each local authority’s own affordable housing targets,’ Nash concluded.[1]
[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/10/government-urged-to-scrap-tax-on-development-land-to-boost-housing-supply