Property investors face another hit from the Budget as empty homes could be hit by a 100 per cent council tax premium.
The move, announced by chancellor of the exchequer Philip Hammond during today's (22 November) Budget, has been described as "crippling" for buy-to-let investors.
Today Mr Hammond gave local councils the ability to increase the council tax premium on empty homes from 50 per cent to 100 per cent.
He said: "It can’t be right to leave property empty when so many are desperate for a place to live."
The move follows many controversial changes in recent Budgets which have hit property investors, including the 3 per cent stamp duty surcharge on additional properties and the decision to restrict the amount of tax relief a landlord will be able to claim on mortgage interest to the basic rate.
Meanwhile earlier this year Mr Hammond banned tenant lettings fees, saying landlords should pay for the agents they appoint themselves.
Danielle Cullen, managing director of rental listings business ClickTenant, said: “Yet more crippling announcements by the Chancellor for private landlords - with the introduction of 100 per cent council tax now for all empty properties.
"Landlords have been completely paralysed by Conservative announcements recently, with the UK moving down 10 places in the list of best European countries to invest in BTL property in recent months.
“We’re also still no more informed on the tenant lettings fee ban, which is also set to increase rental costs for landlords, as many agents have outlined they will have to pass over the costs."
But Ms Cullen said landlords should continue to invest, since the reforms were merely reducing yields and property owners could make savings elsewhere.
Meanwhile Karen Barrett, chief executive of Unbiased, said: "Hammond has wised up to the number of potential homes standing empty. Now second-home owners are to be penalised if they leave them unoccupied, as a council tax premium of 100 per cent will be levied on empty properties.
"This announcement should be welcomed by renters struggling to find affordable accommodation, and may also bring more properties onto the market as owners choose to sell rather than pay the premium."
damian.fantato@ft.com
