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Reform Jersey has raised concerns over the safety of a new Government scheme encouraging islanders to let out a room in their home in return for a tax break.
Under the Government's'Rent A Room Scheme' launched yesterday, homeowners can receive tax relief on rent that they receive for letting a bedroom in their own home from 1 January 2023, provided the total gross income does not exceed £10,000.
Housing Minister David Warr said he was “confident” it will “lead to an increase in accommodation for people seeking somewhere to stay for a relatively short time”.
But Reform Jersey are concerned about the apparent lack of safeguards around the scheme for both tenants and landlords.
In December, Reform's Deputy Rob Ward proposed an amendment to the scheme to ensure rooms could only be rented if they met minimum health and safety standards, including requirements around electrical and gas safety, smoke detection and other hazards ranging from damp and mould to excess cold and trip hazards.
They also asked that an option for participants to be able to check whether the prospective tenant or homeowner is subject to the notification requirements of the Sex Offenders (Jersey) Law 2010)" be included.
Pictured: Reform Jersey.
However, the suggestion was voted down by the States Assembly.
Deputy Sam Mézec, party leader, described the proposed tax relief scheme as one that had "not been properly thought out by the government".
He also said the scheme – which they estimated would cost the public purse £330,000 in lost taxes – was "poor value for money for taxpayers".
"This represents a £2,000 tax cut for people who already make money by renting out rooms in their homes, for doing nothing extra whatsoever," Deputy Mézec said.
"A much better use of this money would have been to hold a publicity campaign informing landlords of their rights and responsibilities towards their tenants, to ensure that if they choose to rent rooms out, they are fully aware of their legal obligations and can keep themselves and their tenants safe.
"The fact that the government has seen this as a greater priority than previously proposed actions such as a private sector rent freeze, shows that they are out of touch with the needs of those Islanders who are desperately struggling with the housing crisis."
The scheme was previously welcomed by St. Brelade's College, an organisation which has managed the placement of overseas students in local homes for around 45 years.
Sid Brown, principal of the college, said at the time: "In our experience, many prospective hosts are deterred by the fact that they have to declare and pay tax on the income, possibly because they are scared they may fall foul of the tax department and are often unaware that there is a 50% reduction in the tax rate if they provide meals."
Pictured: Deputy Ward said providing a tax break for those offering accommodation for language students "must be questioned" as a good use of public funds.
However, Deputy Rob Ward said today: "[The Rent a Room Scheme] is not addressing the housing crisis faced by young people wanting to build a career on the island or for families struggling to find appropriate accommodation.
"It will provide a tax break for those offering accommodation for language students which must be questioned as a good use of Government money.
The 'Rent a Room' initiative is one of several ways the Government is seeking to address the housing crisis.
In November, Deputy Warr said he was looking to clamp down on homes being used as AirBnb properties.
The following month, he published an 'Action on Vacant Properties' plan, which listed an annual charge levied against vacant properties and the Government using compulsory purchase powers to bring vacant properties onto the local market among the "drastic" measures under consideration.
The scheme enables homeowners to receive tax relief provided that:
the total gross income does not exceed £10,000;
the room is not rented to a family member;
the room is in the homeowner's main residence, and is not a self-contained unit; and
the lodger is over 18 or placed in the room by an appropriate organisation if they are under 18.
'Rent a Room' tax break introduced in Jersey
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