Clause 24 response from Tim Loughton MP

Reply to the comment left by "Jonathan Clarke" at "29/09/2016 - 08:58":

Hi Johnathan

My MP also sends bland replies and never directly addresses/answers the points raised. Usually they pass it on to someone else (e.g. HMRC) and then send me a copy of their bland useless reply.

Direct action is a great idea, but you would need all the landlords serving the s21 notices to be in the same local authority area, and you would need their tenants to all co-operate and be willing to waste lots of time and suffer lots of hassle hanging around at the council's homelessness office all day. I cannot see how such co-operation and co-ordination would work, but would be great if it did! (and could be repeated/replicated).
It would probably have to be higher numbers as well, if you wanted lots of press coverage, as the press generally care little about landlords, tenants, or benefit recipients, their focus tends to be the same as the government's, homeowners and perhaps OAPs.

Reply to the comment left by "Robert Mellors" at "02/10/2016 - 10:40":

The only way to get press coverage is to pay for it!

Let's all throw some money at joined up advertising to put the fear of death in the country and raise awareness to other landlords who are oblivious to section 24. The more landlords the more power we will have collectively

Crowd funding for advertising - I will throw in the first £100

Reply to the comment left by "mia scot" at "02/10/2016 - 18:33":

Hello Mia

Having been involved with marketing and PR for nearly 39 years I can assure you there are better ways to publicise the problems than advertising.

Our campaigning and the Judicial Review has been reported on extensively in all National Mediá without a penny having been spent on advertising. This exposure will intensify significantly over coming weeks and months as a result of the Judicial Review and campaigns focussed on Housing Departments in local Councils.

Please consider your £100 better invested into a donation to Property118 or the #TenantTax group.
.

Reply to the comment left by "Mark Alexander" at "28/09/2016 - 10:41":

Another response, on a similar theme:

It may be helpful if I explain the Government's position. At Summer Budget 2015, the
Government set out a package of measures to reduce the budget deficit and rebalance
the economy. The Government wants a fair tax system. This means ensuring that
landlords with the largest incomes no longer receive the most generous tax treatment.
Landlords are able to offset their mortgage interest and other finance costs against their
property income, reduclng theii tax liability. This also means landlords get relief on their
finance costs at their marginal rate of income tax. By restricting finance cost relief to the
basic rate of income tax, all finance costs incurred by individual landlords will be treated
the same by the tax system.
Further to this, income tax relief for finance costs is not available to ordinary homebuyers
and not available to those investing in other assets such as shares. Restricting the relief to
the basic rate means that the Government is reducing the distortion between property
investment and investment in other assets, lt is also reducing the advantage landlords
may have in the property market.
Using actual self-assessment data, HM Revenue and Customs (HMRC) estimate that only
1 in 5 landlords will pay more tax as a result of this measure. We appreciate that some of
these landlords may face difficult decisions regarding their propertres. This is why the
Government has chosen to act in a proportionate and gradual way. Basic rate income tax
relief will still'"be available on a landloi'd s finance costs, the restriction will not be
introduced until April 2017 and then it will be phased in over 4 years. This gives landlords
time to plan ahead of the changes.
Given that only a small proportion of the housing market is affected by this change, the
Government does not expect these changes to have a large impact on either house prices
or rent levels. The Office for Budget Responsibility (OBR) also expect the impact on the
housing market will be small. Taking account of this and other measures at Summer
Budget 2015, the OBR did not adjust their forecast for house prices.
Housing and home ownership are very much a priority for the Government. Good
progress was made over the last Parliament to boost home ownership and supply;
housing starts were at a 7 year high (2014-1 5 on 2007-B), and the number of first time
buyers rose by almost 60% between 2010 and 2014. This was driven by a new National
Planning Policy Framework; direct delivery of homes, with over 260,000 affordable
homes delivered since 2010; and the Help to Buy schemes, which have helped almost
'120,000 people on or up the housing ladder.
The Spending Review built on the progress made over the last Parliament and chooses to
prioritise housing. The Government will double the housing budget from 2018-19 and
has set out the most ambitious affordable housing plan since the '1970s to support
working people in their aim to own their own home. All of the measures In the plan
together amount to over f20 billion of investment in housing between 2016-17 and
2020-21.
Officials have been in consultation with key stakeholders, such as tax accountants and
landlord associations, to discuss the legislation. The Government will keep this policy
under review as it does with all tax policy.
More details on the changes and how they will work can be found online at:
http://www.gov. uly'governmenVnews/changes-to-tax-relief-for-residential-landlords
Please pass on my thanks to Mr Underhill for taking the trouble to make us aware of
these concerns.
Kind regards,

Jane Ellison (Financial Secretary to the Treasury)

This reply by the Financial Secretary to the Treasury repeats Osborne's misrepresentation in his budget announcement of the legislation, namely that it is "restricting finance cost relief to the basic rate of income tax". This is a deception and explains why there is so little awareness of what the actual effects of Section 24 will be. As readers of Property 118 know, far from merely being a restriction to the rate deductible, it is a total restructure of the tax regime. Repeating this deception in the press and elsewhere has contributed to the wider public's perception of us as "greedy landlords" who, not content with receiving concessions not granted to mortgaged owner occupiers, (not true of course) now have the cheek to complain about having to pay tax at the higher rate. It gives the impression that at the moment rich landlords are exploiting a tax dodge to avoid payment of tax at a fair rate.

Once again I find myself confused. Their real intent was to shake up the housing market and make it fairer for home owners and first time buyers to get on and up the housing ladder.

This change was meant to make housing stock available to those markets and discourage investors from buying up all the houses, (me thinks)

However if, as we are expected to believe, the statement "Given that only a small proportion of the housing market is affected by this change" is true how is this change going to have any material effect on such a large marketplace?

The truth is it will have a huge effect because it will effect far more people than anyone has anticipated.

Reply to the comment left by "Richard Underhill" at "03/10/2016 - 10:19":

I received exactly the same response from my MP - a few months ago - when contacting her with regards to clause 24. The Treasury seem to have a standard text for all MPs to pass on.

Reply to the comment left by "Chris Clare" at "03/10/2016 - 12:10":

Do you really think that was the real intent of this tax change? I am sceptical and, as you note, it does not square with their insistence that only one in five will be affected. It seems to me that the intention was to force repayment of personal debt at the same time as raising extra tax revenue, thus going some way towards improving the nation's precarious finances. To the extent that mortgaged landlords are selling up and/or reducing their loan to value percentages it would seem to have been successful in one respect but at the cost of horrendous repercussions throughout society, because of a total lack of joined-up thinking.

Reply to the comment left by "Old Mrs Landlord" at "03/10/2016 - 14:14":

This is what I don't get so many people say it doesn't effect many landlords yet they make out the benefits will be great reducing the nations indebtedness and raise tax.

They need to make a choice if it does not effect many, the benefits in turn will be minimal. However my belief is it does effect many and that is why the benefits to the state will be great.

It will raise a huge amount of tax and most definitely create a seismic shit in the housing market, this level of effect can only happen if it in turn influences many people.

Reply to the comment left by "Chris Clare" at "03/10/2016 - 16:54":

Yes, Chris, it's already raised a lot before it even comes into effect as individual landlords incorporate, having to pay thousands in CGT to sell their properties to their limited company and stamp duty to buy them back again. The seismic shift I assume you intended to refer to will reverberate throughout society and the economy, not just the housing market with, as you say,
many negative effects on many people and very few positive ones at all.
(Sorry, we seem to have taken this thread rather off its original topic.)