Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Mark Alexander" at "06/09/2015 - 12:59":

Ha ha, definately not unless you are trying to scupper your own campaign 🙂

Reply to the comment left by "Claire Oswald" at "07/09/2015 - 13:06":

Thankfully, the personally abusive comments have all been removed and the authors of them have been banned from posting on The Telegraph website.
.

Thanks All, Have just emailed my local MP and the Tory opposition member.

Reply to the comment left by "Maharaja " at "07/09/2015 - 13:57":

Good stuff Maharaja.

Just sent the letter to Sajid Javid, Secretary of State for Business, Innovation and Skills and Anna Soubry, Minister of State (Department for Business, Innovation and Skills) (Business and Enterprise)

Reply to the comment left by "Barry Fitzpatrick" at "07/09/2015 - 14:43":

Great Barry. I sent them to those two as well, which is good (business, my a**e, if they go along with this).
Does anyone know how to get Nick Boles and Brandon Lewis' email addresses and if so, can they send the letter to them, as I couldn't find those addresses when I tried?

For ease of reference, anyone who want to can send this slightly different version to George Osborne:

To whom it may concern.

I am assuming a member of George Osborne's staff will read this, so I would draw your attention to the fact that you should be advising the Chancellor that he is making a grave mistake in his attack on landlords announced in the Summer Budget. Perhaps he has 'yes men' surrounding him, but I think he would be grateful to you in the long run if you pointed out to him some of the serious reasons why he should re-think the 'tax relief restriction.' My letter to him is as follows:

Dear George Osborne.
I am writing to you with regard to the Finance Bill, which is to be debated in Parliament tomorrow. As a landlord, I have been shocked at this sudden and brutal attack against our businesses and am hoping you will reverse this draconian and punitive tax. For the sake of brevity I am going to refer you to a few articles which summarise many of the issues and would just ask that you take a look and then, and re-think the consequences of this 'Clause 24,' which aims to tax private landlords regardless of whether they make a profit and even to tax them on a loss - a bizarre and grossly unfair idea, that I can hardly believe has been seriously suggested in an advanced country such as the UK. A set of articles can be found here:

Death of buy-to-let: landlords wake up to Osborne's 150pc tax

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Death of buy-to-let: landlords wake up to Osborne's 150p...
Buy-to-let investors paying more than 100pc of their profits in tax are already selling up
View on http://www.telegraph.co.uk

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I am also pleased to say that the Telegraph has continued the campaign over the weekend. The media is generally so anti-landlord, that it is a relief for us to have one voice of reason out there.

I've pasted the link here to the article.

'I own 75 buy-to-let properties but I haven't deprived other buyers'

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'I own 75 buy-to-let properties but I haven't deprived o...
As investors digest George Osborne’s surprise new tax on buy-to-let, questions emerge about the wider impact on housing and rents

View on http://www.telegraph.co.uk

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The case studies in it of portfolio landlords are particularly interesting and show how the Government's policy will kill off buy-to-let mortgages and the businesses of landlords who provide a critical role supporting the housing needs of the UK. The impact of the policy will also include stopping expansion of the housing stock just as more housing is needed, as no landlords dependent on finance will build or renovate old housing now to bring it back into use (a model I have used for years).

The justification you have given for this attack on landlords suggested you would be creating a 'level playing field.' This has since been conclusively proven to be wrong. If you have time, it would be worth you looking at this other link which shows that there is a very uneven playing field, but that it goes in the opposite direction. Landlords would actually love a level playing field with owner-occupiers as we would have to pay no tax on our rental income or any CGT when we sell houses which have increased in value. There are many other advantages too of being an owner-occupier; not just tax advantages.

A Level Playing Field Between Homeowners and Landlords | Property118.com

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A Level Playing Field Between Homeowners and Landlords...
Property118 Forum for Private Landlords

View on http://www.property118.com

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Apart from this 'turnover tax' being wrong in principle, it is also wrong to make it retrospective - applying it to properties that were bought years ago under the current tax regime. Both you and the Treasury officials keep reiterating the idea that you are giving us 4 years to get ourselves organised - when in fact it's supposed to be starting in just over 18 months' time. In any case, the only realistic options we have are to put up rents (which won't be enough to compensate for many), to sell or to go bankrupt. What a great set of choices they're giving us. And why? Are we drug dealers? Do we sell alcohol that makes people ill? No. We provide rented accommodation.

Many of our tenants are going to be have a very nasty shock when their rents go up and/or they are given their notice. A report has shown that 20% of landlords are likely to leave the rental business as a direct result of this measure and no-one knows how many properties these 20% own, so we are likely to be looking at massive chaos in the private rental sector.

The Government through this tax states that it is favouring owner-occupiers, but what about tenants? Tenants have been ignored and don't even figure in their impact assessment. Many of these people are going to be devastated to lose their homes. But this is inevitable as how can we, as landlords, pay out of our own pockets indefinitely for people to live in our houses, as we will have to do when interest rates rise and we are being taxed on a loss? (many of us can handle interest rate rises per se - just not when our costs suddenly appear as our 'income,' on which we are to be taxed). Housing Associations may be able to pay for people to live in their houses, operate at a loss and get bailed out at some point - and the staff still receive their salaries at the end of the month - but private landlords can't, when we rely on the 'profit' for our living.

If you have time to read up further on the complex issues involved, I give you another link to an article which explains more about what is so wrong about this idea.

Restricting finance cost relief for individual landlords

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Restricting finance cost relief for individual landlords
Property118 Forum for Private Landlords
View on http://www.property118.com

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Anyway, I hope you can reverse this incredibly unjust decision. We can see through misleading comments about 'generous tax relief' and hitting 'the wealthiest landlords' (when it is in fact hitting the landlords who owe the most and leaving the wealthiest landlords, who don't have mortgages, untouched). Please reverse this decision.

Yours sincerely

The email address is:

public.enquiries@hmtreasury.gsi.gov.uk

Hmm.

LLs who deal with Local Authorities will be affected by loss of capacity for housing for Housing Benefit tenants. LLs who will have to sell such properties or change the tenants for higher yield due to these tax changes should tell them.

Thought that I would point out that renters can (subject to tenancy agreement) sub-let a room tax free under the rent a room scheme, and you are mistaken in your assertion that it is not only owner-occupiers who benefit from this.

Also, fighting the "level playing field" argument by pointing out the tax advantages of owner occupiers I think may fall on deaf ears purely because treasury believes (or at least has intimated) that leveraged landlords are crowding out first time buyers.

I would therefore imagine that, from treasury's point of view, the tax advantages of owner occupiers over landlords are irrelevant as these advantages depend on potential owner-occupiers being able to purchase in the first place; it is difficult to argue that at the point of purchase a leveraged landlord does not have a cash-flow advantage over potential owner-occupiers as a landlord (currently) gets relief on the interest payments whereas the owner occupier doesn't.

Reply to the comment left by "Barry White" at "07/09/2015 - 17:13":

Barry, these simplistic and one-sided arguments have been refuted many times here - I don't know if anybody can be bothered to do it all again - the way that you want landlords to have the same treatment in one way (no so-called 'tax relief') but not in other ways (no tax on rent received and no CGT for either)...
Also, regarding sub-letting, most tenancy agreements wouldn't allow it - as it's a minefield. When the landlord gets a knock on the door because of over-crowding that they have no idea about, what happens then? It's the usual 'these are tenants' rights' argument with no thought about the tenants' responsibilities. The landlord would be blamed every time. It's tedious.

RLA Treasury Consultation

Monday 7th September 2015

Dear Kathy,

The RLA has been asked by the Treasury to put forward proposals that support the Government’s objectives of increasing housing supply and raising standards in the private rented sector.

We now need your help to explore a range of measures, including: changes to capital gains tax; support for energy efficiency measures and improvements; and, small scale build to rent. This will help the Treasury understand how landlords will respond, if such alternatives were introduced.

We are working with DJS Research, who have produced a short survey that will take around 15 minutes to complete. Your views are very important. Please complete the survey clicking here.

The RLA has opposed the Government’s Sumer Budget plans to limit tax relief on finance charges for private landlords to the basic rate of income tax. We have backed an online petition and questioned the Government’s assessment of the impact on housing supply and rents.

Thank you for your help and support as we continue our dialogue with the Government.

Kind regards

Alan