The government released its Residential Real Estate Developer Tax Bill, in which it confirmed its intention to exclude the purpose-built student housing sector. However, the rental construction sector remains uncertain as to its inclusion in the scope.
Building safety is a priority for the rental construction industry, and the industry has ensured that tenants are both safe and protected from any financial impact.
The British Property Federation has made this clear to the government, and that it would be disproportionate to include rental construction within the scope of this new tax, while investor-promoters of rental construction remain fully responsible. remediation work and that the costs are not passed on to the tenants. Taxing the rental construction industry to enable remediation work in the homes for sale market would be unfair.
Over the past 10 years, the UK residential rental market has evolved considerably, driven by investments from large institutional investors, such as pension funds, seeking stable long-term returns.
The rental construction sector, while still relatively new, is growing – with a pipeline of around 200,000 homes over the next few years – and making a valuable contribution to the government’s ambition to deliver 300,000 new homes per year.
The counter-cyclical nature of the build-to-hire business model means the industry has continued to invest and deliver throughout the pandemic, and across the country, creating and sustaining jobs and supporting upgrade ambitions. of the government. This new tax on real estate developers puts that at risk.
Ian Fletcher, Director of Property Policy for the British Property Federation, said: âWe welcome the exclusion of the purpose-built student housing sector from the new tax on residential property developers. This will support new investments in modern, high-quality housing for students, as well as the recovery and growth ambitions of the higher education sector.
âThe political decisions regarding the inclusion of the rental construction sector in this new tax have not yet been finalized – and we continue to advocate for its exemption. The rental construction industry has not contributed to building safety issues and attributed financial disputes between landlords and tenants, which this property tax from real estate developers is intended to fund.