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Furnished Holiday Lettings: Taxation
01 May 2024
Lead MP
Peter Aldous
Waveney
Con
Responding Minister
Nigel Huddleston
Tags
EconomyTaxationCulture, Media & Sport
Word Count: 3931
Other Contributors: 8
At a Glance
Peter Aldous raised concerns about furnished holiday lettings: taxation in Westminster Hall. A government minister responded.
Key Requests to Government:
The MP asks for a full public consultation on the proposed changes, citing concerns over the lack of consultation prior to the proposal. He requests that the Treasury consider reversing mortgage interest relief restrictions and ensuring no retrospective taxation for entrepreneurs in the FHL sector.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The MP is concerned that the proposed changes to the taxation of furnished holiday lettings could have unintended consequences, particularly in areas where such rentals are a vital component of local economies. He highlights that only 0.4% of the UK housing stock falls within the FHL regime and argues there is no statistical evidence linking furnished holiday lets to the housing crisis or house prices. The MP also mentions potential job losses and economic impacts if the proposals are implemented.
Alistair Carmichael
Lib Dem
Orkney and Shetland
Understood housing shortage concerns but argued building more houses is the solution; advocated for improving the sector through tax provisions to enhance visitor offerings.
Angus MacNeil
SNP
Na h-Eileanan an Iar
Questioned the Chancellor's claim about housing distortion without evidence; pointed out Norway as a case where second homes do not equate to affordable first homes.
Beaconsfield
Suggested the need for an impact assessment to evaluate effects of reforms on economy, housing, tourism, GVA, and jobs. Asked if the Minister was willing to look at a carve-out—an exemption—for properties that cannot be used in the private rented sector because of covenants on them, which was discussed by the Office of Tax Simplification.
Christine Jardine
Lib Dem
Edinburgh West
Highlighted concerns from representatives of Scotland's furnished holiday lets association about double impact of legislation and licensing rules, called for a joined-up approach.
Thérèse Coffey
Con
Suffolk Coastal
The MP acknowledges challenges faced by local people looking to rent homes near Southwold and agrees that while some measures might be beneficial in certain areas, they should not apply universally.
Duncan Baker
Con
North Norfolk
Thanked his hon. Friend for bringing up the issue of housing supply in North Norfolk, noting concerns that new tax changes might lead to more second homes being bought and exacerbate the housing situation.
Jim Shannon
DUP
Strangford
Congratulated the hon. Member on bringing forward the debate, expressing desire to attract bed nights through Airbnb-type scenarios in Strangford, questioning if removing tax incentives would prevent local economy benefits.
Expressed widespread concern about changes from East Devon owners and operators, suggested a public consultation and exemptions based on property location or use.
Government Response
Nigel Huddleston
Government Response
Stated there are no plans for a consultation but that does not mean that hon. Members cannot engage with him. Acknowledged the broad recognition that the current system is contributing to some distortions, such as an incentive for disproportionately large numbers of properties being used for short-term rentals rather than long-term rentals. Mentioned hearing from hoteliers and owners of B&Bs who complained about the unfairness of the current system and from pub, bar, and restaurant owners who said the number of short-term lets was undermining their value proposition. Emphasised that FHLs play a vital role in the tourism ecosystem but noted the proposed changes would put them on an equal footing with long-term lets to level the playing field. Noted that abolishing the tax regime does not mean eliminating FHLs, and there will still be benefits such as £2,400 taken off income tax for higher rate paying landlords with mortgage interest costs of £12,000 per year after abolition.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.