Stamp duty rules should be reformed in the Budget to help boost the supply of homes to rent, landlords have urged.
The property tax applies in England and Northern Ireland, and an extra 3% charge usually applies if buying a new home means that people will own more than one.
The National Residential Landlords Association (NRLA) wants Chancellor Rishi Sunak to scrap the 3% levy on the purchase of homes to rent, in cases where landlords invest in properties that will add to the net supply of housing.
The NRLA said this would include developing new housing, converting large properties into affordable homes, changing the use of a property from commercial to residential, or bringing one of the nearly 650,000 empty homes in England back into use.
The Budget will be delivered on March 3.
Supporting growth in the private rental market, alongside all other housing types, would provide a significant boost to the economy in the midst of the Covid-19 pandemicBen Beadle, National Residential Landlords Association
NRLA chief executive Ben Beadle said: “To have a tax on developing new housing is completely nonsensical at a time when more is needed.
“Supporting growth in the private rental market, alongside all other housing types, would provide a significant boost to the economy in the midst of the Covid-19 pandemic. Research published last year suggests that landlords inject over £3.5 billion into local businesses across the UK.”
The NRLA also said tax rules should encourage the provision of longer-term rental property over short-term holiday lets. It claimed the current system has encouraged the removal of properties from the long-term market for use as short-term holiday lets.
Mr Beadle continued: “To be taxing long-term homes to rent less favourably than holiday lets is simply bizarre. It completely undermines efforts by the Government to encourage the provision of long-term, secure housing.
“It is time for the Government to realise that its tax policies have created a shortage of rented housing. This can only mean higher rents and reduced choice for renters. This is not going to do much for the levelling up agenda.”