A controversial new change to housing rules has been dubbed a “Tenant Tax” by local MP, Justin Madders, after research by the Labour party revealed that some Council tenants in Ellesmere Port & Neston will face an average hike in their rent of £3,346.
Under the rules introduced by the Conservative Government; households with a joint income of over £31,000 (as little as £15,500 each), have been labelled ‘high income households’ and will face a 15p rent rise for every extra £1 earned.
The change will apply to the 5,590 households in Cheshire West & Chester renting from the Council if they earn above the threshold. These changes will apply to families earning far less than the £54,500 average local household income where there are two earners.
According to Labour’s research, this would lead to an adult earning £23,000 a year with a partner earning £9,000 paying an effective tax rate of 83% on any extra earnings. Mr Madders has argued that this represents a “blatant attack on working class aspiration.”
The “Tenant Tax” is expected to start in April 2017 for council tenants, under the Housing and Planning Act. The change will be voluntary for housing associations, following Labour-lead objections as the Act went through parliament.
Commenting, Justin Madders MP said:
“This change is a blatant attack on working class aspiration. For many it will mean that it would make little financial sense to take on more hours, move to a better-paid role, or for a partner to get into work in the first place as in some cases, over 80% of extra earnings would be handed back in additional rent.
“The rent paid by tenants already funds the cost of building and maintaining homes - the fact is that there is no subsidy from the Government. The money raised from these rent hikes won’t even go back into funding new housing, but will be seized by Theresa May’s government.
“The Prime Minister promised middle income families that ‘When it comes to taxes, we’ll prioritise not the wealthy, but you.’ She should start now, by scrapping this tenant tax.”