Property tax management and its impact on social housing and governance: a case study of the stamp duty land tax exemption for registered social landlords.

Wynter, Carlene; Manochin, Melina; Hidayah, Nunung Nurul; Lauwo, Sarah

Abstract

The UK has the highest property tax burden of any developed country, yet the housing market has been persistently volatile, distorting housing choices, and with huge arrears and repossession rates that inhibit housebuilding and heighten wealth inequalities. Following a public outcry to reform stamp duty, because it was known to be implicated in the housing market's volatility, a tax reform was initiated in 2003, and later expanded in 2014 to give broader coverage to actors involved in the production of social housing. The government's main purpose was to alleviate the housing crisis by ensuring the provision of decent and affordable housing. This research is concerned with how the stamp duty land tax exemption (SDLTE) has impacted on the governance and operations of registered social landlords (RSLs) in providing decent and affordable housing. RSLs are independent housing associations registered with the Homes and Communities Agency (formerly Housing Corporation). They have been part of the housing market since the 1970s, when local authorities unable to manage their own social housing transferred their housing stock to RSLs. There are approximately 1,800 RSLs in England, operating as acquirers and developers of around two million properties and providing affordable housing to about five million tenants. A qualitative approach was adopted in this project, and data were gathered through 22 semi-structured interviews with revenue officials from the Stamp Duty and Compliance Sections of the HMRC, officials from the National Housing Federation (NHF), the National Audit Office (NAO), Social Regulator Housing and local authorities in the West Midlands, and tenants and executives from four RSLs. These were supported by documentary analysis, as well as observations from meetings, workshops and seminars conducted by housing professionals and practitioners. One of the hardest aspects of successful qualitative research is gaining access to research participants. In this study, access was hampered by the sensitive political nature of both taxation and housing, since perceived misuse of the tax incentive might be considered unethical or illegal. Our study reveals that rather than expanding the supply of affordable housing, the SDLTE has been a device to enhance RSLs' operational profits, and is pivotal to the government's unstated objective of removing social housing from its Housing Revenue Account. The SDLTE regulates and makes RSLs responsible for meeting these objectives. RSLs' main approach to providing social housing is business- rather than socially-oriented, and their organisational practices are therefore, market-oriented. In this regard, RSLs are more involved in commercial housing activities through the provision of affordable housing, market rents, share-ownership schemes and sales. We conclude that rather than being used as a mechanism to provide more decent and affordable housing for the vulnerable, the SDLTE has become a technology of governance or a device to increase RSLs' involvement in commercial activities and make them self-regulated. No governance accountability structures have been established to either report on or attest to the efficacy of the SDLTE in alleviating the housing crisis, and particularly social housing.

Citation

WYNTER, C., MANOCHIN, M., HIDAYAH, N.N. and LAUWO, S. 2021. Property tax management and its impact on social housing and governance: a case study of the stamp duty land tax exemption for registered social landlords. London: Chartered Institute of Taxation. Hosted by the University of Southampton Institutional Repository [online]. Available from: https://eprints.soton.ac.uk/id/eprint/457824

• Report Type: Project Report
• Online Publication Date: Jun 20, 2022
• Publication Date: Jan 31, 2021
• Deposit Date: Mar 19, 2024
• Publicly Available Date: Mar 19, 2024
• Publisher: Chartered Institute of Taxation
• Keywords: Property tax; Social housing; Stamp duty; Stamp duty exemptions; Landlords; United Kingdom
• Public URL: https://rgu-repository.worktribe.com/output/2278707
• Publisher URL: https://eprints.soton.ac.uk/id/eprint/457824