Lobbying pays off for housing co-ops
Housing co-ops (those not classed as social landlords) have to pay an additional tax of at least £3,500 a year on properties with a value over £500,000. Some co-ops have faced putting up rents by 39 percent to cover this. Newly forming housing co-op looking to buy a property valued over £500,000 are also hit with an additional 15 percent on Stamp Duty, which can only be covered through charging much higher rents.
Measures revealed in the Budget 2020 announcement will put an end to these punitive taxes. The welcome news follows great collaboration between Co-operatives UK, Friendly Housing Action, Radical Routes and the Confederation of Co-operative Housing. Evidence gathering and detailed submissions prompted the tax change which means shared housing co-ops can be that affordable and empowering alternative to renting from a landlord - even in places where the cost of housing is sky high.
Housing co-ops are not oligarchs
Enveloping is when ownership of expensive residential property is placed in a corporate entity (or web of entities), as a means of hiding asset ownership and avoiding taxes.
As housing co-ops also own property via a corporate entity, they were caught up along with the oligarchs. Government made sure this didn’t happen to social landlords and legitimate property related businesses but, as is so often the case, co-ops were not properly considered - before our intervention.