Housing

Spring Budget: Rent campaigners accuse Jeremy Hunt of 'landlord giveaway' capital gains tax cut

The chancellor cut the tax paid on profit when selling an asset from 28% to 24% but it was not popular with landlords either

Jeremy Hunt slashed capital gains tax at the Spring Budget sparking fears landlords will sell up

Slashing capital gains tax has sparked fears that more landlords will look to sell properties and evict tenants. Image: Different Resonance / Unsplash

Rent campaigners have accused chancellor Jeremy Hunt of a “landlord giveaway” by slashing capital gains tax at the Spring Budget – but the move has been criticised by landlords too.

Hunt cut taxes paid on the profits from selling a property down 4% from 28% to 24% after the Treasury and the Office for Budget Responsibility concluded the move would “increase [tax] revenues because there would be more transactions.”

The move has been criticised with Green MP Caroline Lucas blasting Hunt’s decision as a “blatant giveaway to the richest people in the country”.

Rent campaigners have warned that the cut may encourage landlords to sell up, leaving more tenants at risk of an eviction particularly as the Renters Reform Bill continues to stall in Parliament.

Ben Twomey, chief executive of Generation Rent, said 16,470 households in England were either made homeless or threatened with losing their home because their landlord wanted to sell their property in the six months to September 2023.

“This tax giveaway to landlords could make thousands of renters homeless,” said Twomey.

“The only reason the chancellor is doing this is because of the expectation that a lower tax rate will boost the number of sales, but apparently no thought has been given to the people living in those homes, who will generally face eviction before the landlords put them on the market. 

“It is particularly counterproductive given that the government is currently legislating on measures to reduce evictions.

“If the government insists on going ahead with this cut, then renters will need better protection from eviction. Government could make the new rate conditional on selling with a sitting tenant, or even selling to the tenant, so that they aren’t forcing people out of their homes.”

But the Hunt’s decision to cut capital gains tax has not proven popular with landlords either.

Ben Beadle, chief executive of the National Residential Landlords Association, said that the move will “make no meaningful difference” to the supply of rental properties.

Instead, Beadle criticised Hunt’s “deafening silence” on tackling the housing crisis at the Spring Budget, including no new announcement on whether local housing allowance will rise in 2025 after it is finally unfrozen next month. 

“The chancellor has once again ignored calls to revitalise long-term investment in quality rented homes in favour of tinkering at the margins for short-term gain,” said Beadle.

“Increasing taxes on holiday lets and cuts to capital gains tax will make no meaningful difference to the supply of long-term rental properties. Meanwhile, those reliant on housing benefits still do not know if their benefits will be frozen from next year or not. 

“With an average of 11 tenants chasing every home for private rent, social housing waiting lists at 1.3 million, almost 110,000 households in temporary accommodation and the number of first-time buyers slumping, the Budget needed to tackle the housing crisis once and for all.  What we got was a deafening silence.

“This was a missed opportunity to make providing new homes to rent and buy the priority it desperately needs to be.”

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