The Welsh minister for climate change, Julie James MS, has supported the need to review the way the private rented sector is taxed.

Speaking at an event to launch the National Residential Landlords Association’s (NRLA) State of the Welsh Private Rented Sector report, the minister said she would welcome ideas about how to ensure the tax system supports the provision of long-term homes to rent.

Research in the report shows that 76% of Welsh landlords said demand for rental properties had increased in the first quarter of 2023. Despite such strong demand, almost half – 48% – said they planned to cut the number of properties they let, leaving renters struggling to find a place to live.

Amidst this supply crisis, the NRLA has called on the Welsh government to exempt the purchase of additional homes for long term rent from the 4% Land Transaction Tax levy on additional homes.

Speaking at the event the minister said she was “very interested” in looking at how to ensure a level playing field for the private rented sector in respect of the Land Transaction Tax.

The Minister has further accepted the NRLA’s calls for better data about the state of the private rented sector in Wales.

In its report the NRLA warns that “the availability of comprehensive, up-to-date, and official data on who lives in the sector, its exact size, and the type of properties in it remains limited.”

The minister agreed that the government needed to improve the data to make decisions affecting the rental market. She went on to support the NRLA’s call for a Welsh Housing Survey, subject to completion of a business case by the government.

Ben Beadle, Chief Executive of the National Residential Landlords Association, commented: “Wales needs a strong and vibrant rented sector. We welcome the Minister’s openness to look at how the tax system can support the provision of homes tenants need.

“It is welcome too that the minister has agreed in principle with the NRLA’s call for a Welsh Housing Survey. Too often good decisions have been hampered by a lack of robust data on the state of the rental market. We will continue to work with the Government to ensure policy is rooted in evidence and what works for responsible landlords and tenants.”

The report was launched at an event chaired by Mike Hedges MS, at the Senedd at which the Minister spoke. Speaking alongside her was NRLA Chief Executive, Ben Beadle and Dr Robert Smith from the UK Collaborative Centre for Housing Evidence.