Tax Take: Petition for Sunak to close holiday lets tax loophole

A tenant who says his former rental property has been turned into an Airbnb has set up a petition demanding Chancellor Rishi Sunak make reforms to property taxes. 

Alex McIntyre has posted his petition on the 38 Degrees petition website; the petition is flagged with the logo of the Generation Rent campaign group.

McIntyre, from Plymouth in Devon, says his city has turned into “a city of holiday lets” and he quotes the Cornwall Council figure that Rightmove recently posted only 62 available homes to let in that county, while Airbnb advertised 10,290 Cornish properties available to tourists.

“By removing mortgage interest relief from holiday lets, more property owners will make their homes available to people who need somewhere to live. This will reduce rents, stop people being priced out, and make sure communities in tourist hotspots benefit” he writes.

On social media McIntyre’s petition has been backed by a London Labour councillor - Eve McQuillan, the member of Tower Hamlets council responsible for planning.

Referring to the eviction of long term tenants to make room for Airbnb and other short let renters, she writes: “This is a huge problem in Tower Hamlets. Landlords are able to rent out a flat as a holiday let for three months of the year without any extra permission. It means too many evict tenants after nine months and making housing even more costly and unstable - these lets could be a home!”

You can see the 38 Degrees petition here - its wording is reproduced below. 

I feel privileged to live in Plymouth. It's by the sea, has amazing beauty spots, Dartmoor is close by and the nightlife, pre-covid, was phenomenal. It is one of the UK's top tourist destinations. Unfortunately Plymouth's advantages can also be a disadvantage for its residents.

I lived in my last flat for 5 years. The rent was affordable and it was close to the city centre – but was not in a great state of repair. When I complained to my landlord about the broken boiler and asked him to make repairs to his property, he threatened to evict me.

One day a Section 21 notice arrived for me and the other tenants in the building, meaning we had to move out. The landlord said he was selling up because he did not want to be a landlord anymore.

But a few months later, I discovered he had turned the building into an AirBnB. I found pictures online of my old flat which he had renovated and done up to perfection.

My neighbours and I are not the only ones this has happened to. Plymouth has become a city of holiday lets. Cornwall has 62 homes to rent on Rightmove but 10,290 AirBnB listings. In one village in Wales, three quarters of the houses are holiday homes.

Fewer homes available for residents mean higher rents, and people being priced out of their local areas in search of a home. That erodes local communities and starves local businesses of workers. The only people who benefit are the landlords.

One cause of this is mortgage tax relief, which holiday-let landlords are entitled to but private rental landlords are not. It is saving holiday-let landlords potentially thousands of pounds every year, and actively dissuading them from renting their houses out to locals. After all, why rent to actual residents when the government has made it cheaper to let out holiday accommodation?

We need a level playing field so that the local areas enjoy the right balance between holiday lets and homes people want to live in. By removing mortgage interest relief from holiday lets, more property owners will make their homes available to people who need somewhere to live. This will reduce rents, stop people being priced out, and make sure communities in tourist hotspots benefit.