Saturday, March 9, 2013

They own property, give them money

A year on, who receives government subsidy for housing now?

Analysis of favourable tax treatment to home buyers and BTL brigade by John Perry, policy adviser to the Chartered Institute of Housing. The total annual subsidy to the BTL sector has now reached £8.6bn, or 40% of the benefit bill. Hidden tax reliefs to owner occupiers now worth an estimated net £14bn Favourable tax treatment is a factor in house prices being so high , and in effect is a subsidy to existing owners at the expense of those who want to own but can't.

Posted by stuartking @ 09:27 AM (1061 views)
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2 thoughts on “They own property, give them money

  • mark wadsworth says:

    The £8.6 billion HB payments to “private” landlords is probably accurate, although it is not all pure land subsidy; a quarter of it maybe goes on actual maintenance etc costs.

    But the figure of £14 billion for owner-occupier tax reliefs is wildly understated, the true figure is more like £150 billion a year (i.e. £200 billion land rental value underpinned by the nation-state) of which maybe £50 billion is collected in council tax, SDLT, TV licence and so on.

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  • “…owner-occupiers are heavily subsidised as they don’t pay taxes that might logically apply to the sector. These hidden tax reliefs have grown still further in the past year. They are now worth an estimated net £14bn: that is to say, owners collectively save this amount in taxes that are either charged now on other assets (capital gains tax) or used to affect homeowners. While the figure may be academic, its effects aren’t. The favourable tax treatment is a factor in house prices being so high, and in effect is a subsidy to existing owners at the expense of those who want to own but can’t.”

    Bulls eye. This is the crux of the matter – impoverishment of renters, enrichment of owner occupiers. Welcome to the 19th century.

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