The government is being urged to take fresh steps to tackle the shortage of homes by incentivising landowners and developers to increase the supply of new housing, including more affordable homes, through the introduction of temporary capital taxation reliefs.
The fresh proposal, put forward by London-based chartered accountants Blick Rothenberg LLP, follows a warning from the Royal Institute of Chartered Surveyors (RICS) claiming that the UK faces a severe 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 funds 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.”
“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.”
In a week in which the government said that it would support the construction of more homes for people to buy, Nash added: “There are too many prospective homeowners chasing too few properties and competing with the private rental sector.
“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 given time frame, in line with each local authority's own affordable housing targets.”