Rent a room relief

Published on 22 February 2018

In our response we highlight that we do not think that the supply of housing to the original target group is reduced by Airbnb type arrangements and are therefore not convinced that any changes to rent a room relief are needed, under the banner of making it more targeted to support longer-term lettings. If the rising cost of the relief is of concern to the Treasury, we suggest that one option would be for HMRC to check current rent a room compliance. We also put forward that one way to support more longer-term lettings, particularly in London and the South East, would be to put the rent a room threshold up again – the new £7,500 threshold already appears to have fallen out of step with rising rental costs in these areas.

Rent a Room relief was first introduced in 1992 to incentivise individuals to make spare capacity in their homes available for rent. The government intended this to increase the quantity and variety of low-cost rented housing, giving more choice to tenants and making it easier for people to move around the country for work.  More recently, it is being used by those renting out rooms via Airbnb type online platforms.  

At Spring Budget 2017 the government announced that it would review Rent a Room relief, to explore the case for making the relief more targeted to support longer-term lettings.

The objectives of their call for evidence are to:

  • Find out more about the use of the relief
  • Establish whether the relief is working as the government intends
  • Help inform any potential reform of the relief

Our submission can be found here: Call for evidence – rent a room relief – LITRG response

(22-02-2018)

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