Landlords should have their property taxes boosted or reduced according to how they manage living standards for their tenants, according to a new report.
Around a third of private rented homes fail the government’s decent homes test, according to the Chartered Institute of Housing (CIH).
If landlord property taxes were better targeted to let owners who invest in repairs and maintenance claim more, the CIH believes standards would improve.
In the organisation’s UK Housing Review 2014, chief executive Grainia Long argues landlords who do not look after their rental homes should have their property taxes cut to force them to improve standards.
According to HMRC figures, landlords receive tax allowances and reliefs of around £7 billion a year, of which much is comprised of setting off mortgage interest as a property business expense.
Major improvements that add value to a home are logged as capital spending and landlords see no benefit until the property is sold. These expenses include adding extensions, loft conversions and upgrading fixtures and fittings.
Repairs and maintenance are deducted against rental profits each year. This spending covers like-for-like refurbishments, boiler services and replacing breakages and damaged items.
“If landlords who committed to a higher level of standards benefited from a more targeted allowance, while those who did not saw their allowances stay the same or even reduce, the government could encourage higher standards – without needing to find any extra money,” said Long.
“This government has focused on measures to boost home ownership, but with more and more people living in the private rented sector – including older people, more families with children and more vulnerable people from the housing waiting list – it’s vital that we look carefully at new ways to raise standards.”