Council Tax payable by Landlords under new Labour plans

20/06/19

Tenants would no longer have to pay council tax under plans being considered by the Labour Party. The charge would be replaced with a new “progressive property tax” set nationally instead of by local councils and paid for by landlords instead of tenants.

Owners of second homes, empty homes and those owned by people not resident in the UK for tax purposes would have to pay the new tax at a “significantly” higher rate.

The policy idea is contained in a new report which calls on Labour to make a string of “radical but practical changes in the way land in the UK is used and governed” if it wins the next election.

The report urges a major shake-up of the property tax system in a bid to “discourage the use of homes as financial assets, reduce the tax paid by the majority of households, and encourage more efficient use of the housing stock”.

It goes on to say: “We recommend major reforms of the private rented sector.

“For example, tenancies should be open-ended, and landlords should lose their power to evict a tenant who has not broken the terms of the tenancy agreement for the first three years of the tenancy agreement and should have to provide grounds for eviction after that point.  There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower). We propose that buy-to-let mortgages should be more firmly regulated and restricted.”

The plans could have a devastating impact on landlords alike, just as more and more people look to the private rented sector for a home.  Many landlords have a single property and are saving for a pension.  Surely it is not reasonable to expect them to pay council tax for services that benefit their tenants?

We will continue to watch Westminster with interest and keep you up to date, as and when further proposals affecting landlords and tenants continue to be announced.

 

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