A legal campaign to fight punitive tax relief changes for buy-to-let landlords continues to build momentum as campaigners move closer to raising a £300,000 war chest in a bid to launch a judicial review against the restrictions.
The National Landlords Association (NLA) has announced that it is donating £10,000 to support the a crowd funded judicial review launched by landlords Chris Cooper and Steve Bolton against the government’s contentious decision to remove finance costs for individual landlords.
The announcement was made by NLA CEO Richard Lambert at the Tenant Tax Summit, which took place yesterday at the ILEX in Earls Court, London. The event included a host of speakers form the property world who are opposed to the measure, including Lord Howard Flight, Kriss Akabusi, and journalist Richard Dyson.
The existing rules that permit landlords to offset all of their mortgage interest against tax will, from next year, be phased out, and by April 2020, once they have been withdrawn altogether, it is likely that higher-rate tax payers will only receive 50% of the relief they that currently get.
The curb on the amount of tax that landlords can claim back on their property investments, which were announced by Chancellor George Osborne in the July Budget, could mean buying and renting out property is no longer viable for many.
Attempts to reclassify mortgage interest as anything other than a normal business expense could have a disastrous impact on the buy-to-let sector, with higher expenses passed on to tenants.
According to Treasury forecasts, the tax relief changes will net it close to £1bn a year by 2021.
Until now the NLA had chosen not to donate to the campaign on the basis that it does not believe the Judicial Review will be successful.
Addressing the conference, Lambert said: “We have yet to see an argument which would convince us to change our mind about the Judicial Review’s chances of success, but we have to recognise that there is always the possibility that we may be wrong.
“For all the humble pie I would have to eat, I for one would be quite happy to be proved wrong on this one, so as a goodwill gesture to the campaign in recognition of our shared aim of fighting for landlords, the NLA will donate £10,000 to the campaign fund.
“The NLA is committed to continued lobbying to achieve a political solution to the problem presented by this disastrous government policy and we are hopeful of a positive outcome for the hundreds of thousands of landlords whose businesses are currently in jeopardy.”