The Intermediary Mortgage Lenders Association has warned the Chancellor against “tinkering” with property taxes ahead of next month’s Budget in moves that would “choke off economic growth”.
Rachel Reeves faces a £20bn to £30bn fiscal gap , and in the summer the Treasury floated a series of new homes taxes ahead of the 26 November Budget.
Landlords may also be hit by proposals to apply National Insurance to rental income, in a move the Treasury hopes will raise £2bn.
Labour is also understood to be studying plans for a new local annual property levy to replace council tax over an unspecified phased period.
But Imla estimates that taken together these measures would together raise less than £6bn and would damage a key part of the economy.
Imla executive director Kate Davies (pictured) says: “These numbers simply don’t move the dial. The Chancellor should resist the temptation to reach for politically easy but economically damaging options.
“Most of the property-related measures being discussed would deliver minimal revenue, take years to implement and undermine confidence in the housing market.”
Labour has pledged not to raise income tax, VAT and employees’ national insurance contributions and corporation tax — which collectively account for three-quarters of public revenue.
But Davies argues the government should focus on big-ticket reforms capable of generating significant income more quickly, even if that means making politically difficult choices.
She says: “Tinkering with the housing market will not deliver what the government needs.
“If ministers want growth, they should look at broader, bolder measures that can genuinely raise revenue and support investment. Small, piecemeal tax changes will just add uncertainty, hurt confidence and slow activity at exactly the wrong time.”
Davies adds: “Boosting housing activity is one of the fastest and most effective ways to stimulate wider growth.
“Dampening it will have the opposite effect. The inevitable result of squeezing landlords and homeowners further will be fewer rental homes, higher rents and more misery for renters.”
She adds: “Uncertainty is deeply damaging to business confidence.
“We may not like every decision the Chancellor takes, but the market will respond far better to clarity and conviction than to dithering and indecision.”
Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by finopulse.
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