Better than a bedroom tax

13 Oct 2013 This is an argument I keep having with people, so here it is for reference:

There is certainly a lot of under-occupation in the English housing stock: not much in privately-rented units but a lot in the owner-0ccupied and social rented sectors.  This wastes family-sized dwellings occupied by singles and couples who neither need nor want so much space.

[Later 14 Nov: I was right about OO sector but wrong about social rented sector, where there appears to be little under-occcupation. Tom Neumark has just done a very good blog post with some analysis and mapping from 2011 Census. ]

The coalition’s bedroom tax is not worth any more discussion: it’s mean/punitive, it can’t be implemented because of shortage of stock for affected people to move to, and with luck it will be a political disaster for the coalition to compensate us all for the misery it is imposing on citizens.

The following is a rough and ready solution:

Pass an emergency law, subject to review after say 5 years, which says:

Anyone in any tenure who has un-wanted spare rooms can take lodgers or boarders in their own residence and

  1. They must declare the income for tax and benefit purposes but the first £5000 p.a. (say) will be disregarded; they must register as HMO where relevant and have gas safety certificates;
  2. The right to do this will be irrespective of the wording of their tenancy agreement, lease, deeds, insurance policies or mortgage agreement;
  3. The inheritance tax and CGT treatment of their dwelling (provided it is their principal residence) will be unaffected;
  4. The lodgers/boarders would have to leave if the landlord were evicted.

This would surely bring a LOT of unused space back into use.

I say it’s a rough and ready measure for lots of reasons: in the long run it would need re-negotiation with lenders and insurers; the cut-off would have to be converted into a taper and linked with other tapers in the tax and benefit regimes; for asset-rich people the tax break is a gift and that would need sorting out along with council tax / land tax etc reforms which are also needed. (The royal family, for example, could let out all those spare rooms and avoid tax…  but then they doubtless avoid tax already.)

But I like this as a non-punitive practical emergency measure.  Some knowledgeable person could probably estimate the costs, benefits, impacts.
[Later: Tom Neumark has estimated the potential scope – see link at top]

What do you think?


Author: Editors


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