But government says evaluation of ditched policy showed no strong evidence in its favour
The British Property Federation has called for the reintroduction of stamp duty land tax (SDLT) support for high-density housing.
The membership body said SDLT Multiple Dwellings Relief (MDR), which was abolished last year, was “widely regarded as one of the key policies that supported the growth of the build-to-rent sector over the last decade” and that it should be reinstated for large scale residential housing transactions.
It also urged the government to consider the complete exemption of SDLT in areas with very low land value, like brownfield land and regeneration sites.
On the decision to scrap SDLT MDR, the government said that an external evaluation of MDR carried out as part of HMRC’s Tax Reliefs Evaluation Programme “found no strong evidence that the relief plays a significant role in supporting residential property investment, and that it has a minimal positive impact on overall housing supply or PRS supply.”
>>See also: BPF calls for tax reforms in next month’s Budget to kickstart housing development
The proposal to bring it back is one of several policy recommendations made by the British Property Federation to address the “stark drop” in new private rental sector home delivery, which real estate firm Savills reported to be 77% between 2022 and 2025.
Another key recommendation was to stabilise tax and regulation, with the group saying that “even the suggestion of new taxes or levies can deter inward investment” and hinder the government’s goal to build 1.5 million new homes by the end of this Parliament.
It also called for the appointment of 3,000 additional planners in local authorities to get projects through planning quicker, while simplifying guidance at the Building Safety Regulator for regulators and statutory consultees and prioritising technical expertise in building and fire safety during recruitment processes.
The 400-member organisation also put forward the removal of council tax and business rates on empty units for newly developed or refurbished properties to “reduce upfront costs of a development and significantly support viability.”
It argued that this would encourage faster build out rates and higher-density construction to support the government’s New Towns agenda.
Melanie Leech, chief executive of the British Property Federation, said: “We urge the government to carefully consider the levers it pulls to plug the fiscal hole in the upcoming Budget, as we have seen firsthand the consequence of scrapping multiple dwellings relief on the provision of new rental homes and caution against any ‘quick fixes’ as it will knock already fragile investor confidence.”
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