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TODAY'S OTHER NEWS

Landlords fight back against BTL tax grab, but low chance of success

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all of their mortgage interest against tax will, from next year, be phased out, and by April 2020, once they have been withdrawn altogether, it is likely that higher-rate tax payers will only receive 50% of the relief they that currently get.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.”

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    About time these organisations which are supposed to fight for Landlords did something

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    So this policy will raise £1bn a year by 2021.?? Is that all.?? George Osborne is completely crackers to pursue this policy. The costs to the government will far exceed £1bn a year in additional housing benefits and other costs incurred as tenants are evicted when landlords sell up, and then end up in Hostels/B+B accommodation etc. because there will be insufficient affordable housing stock in the PRS for them to move elsewhere. We are already seeing a fall in the number of properties available for rent, and rents are already rising in some areas to pass on some of these tax changes/costs on to the tenants.(ARLA report last week). This could make even more average rental properties unaffordable to tenants - resulting in even more of them falling back onto government benefits. If that is starting to happen now, what on earth will it be like in 4 years time? Lunacy!

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    Graeme the wording is 'the tax relief changes will NET it close to £1bn a year by 2021'. This is probably being calculated as the return after the costs you so rightly point are taken into consideration. So if there is a net gain of £1bn then is may be worth doing. A bit more research needs to be done methinks.
    However read on with the comment made by Chris Haworth below.

     
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    As was pointed out at the Axe the Tenant Tax seminar yesterday, they tried this in Ireland and the policy was repealed after 3 years

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