Government crackdown on Airbnb short-term lets that are “fuelling the housing crisis”
MP’s have demanded a crackdown on ‘illegal’ short-term letting sites, which they believe are fuelling the housing crisis.
Airbnb was launched in 2008 and allows property owners to rent out their spare room or whole flat for a short period. In the year after the 2015-16 Deregulation Act was introduced, which relaxed restrictions on short term lets, the number of London properties being advertised on Airbnb boomed by 126%.
Local MP’s across the City have complained that the increase in short term lets is fuelling the London housing crisis by pushing up the cost of renting and reducing the supply for long term lets.
In response to this, Airbnb introduced a 90-day limit in December 2016, which prevents users from renting their property for longer than that on the website, to comply with existing legislation.
However, MP’s are still concerned that property owners are abusing legislation and have called for property owners to notify councils of dates that their property is being used for short-letting. They argue that property owners can get around restrictions by using other sites or making slight adjustments to their address.
It is evident that the government is cracking down on abuses to legislation. In the recent Spring Budget the government announced that it intended to “consult on proposals to redesign rent-a-room relief to ensure it is better targeted to support longer-term lettings”.
The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. The purpose of the relief was to allow property owners to rent their spare room out to a lodger; however since the launch of websites such as Airbnb, property owners have taken advantage of this relief.
It is important to remember that if you are an Airbnb landlord, the rental income you receive is taxable in line with any other rental income individuals may be in receipt of. If you are found to have not declared this income the penalties are high, even up to 100% of the tax due. With HMRC’s ‘Connect’ computer system, launched in 2009 and referred to as the ‘snooper computer’, it is only a matter of time before tax evading landlords are targeted and Airbnb lets will be easy prey.
If you have any concerns regarding the issues discussed in this article please get in touch or contact your local MHA MacIntyre Hudson advisor.