The JSHAO came to our place a few months ago and were pushing VERY hard for people to buy houses. However, they know we can't afford them in many of the places we are based (Marlow anyone?), so were simply pushing the idea of Buy-to-Let - anything -anywhere.
The subject of LSAP came up (though I don't recall any mention of the tax issue), but that allowance is not available to you unless you live in the house. ISTR that even if you plan to live in the house, but are posted away and therefore forced to let (eg moving from Lincoln to High Wycombe) or else sell-up, the LSAP has to be repaid. It is this aspect of this allowance that would cause me concern.
The housing for Service Families is in a mess and with the annual release of 10% of FQs for Anington to sell to civvies (often for way beyond the budgets of Service pers), it won't be too long before they run out. So, in a few years, the MoD will be faced with either buying a load of FQs back, or coughing up even more cash for SSFA, and we know that the MoD can afford neither option!
STH