10:19 AM, 29th August 2015, About 9 years ago 94
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Dear Mr Freeman
A response was received this week to the petition to Government regarding the restrictions of finance cost relief to individual landlords. The key message seems to be that Government wishes to “level the field” for homeowners and landlords. I have given that a lot of thought, and on reflection I think I may have been wrong all along. I now agree the playing field should be levelled. I have listed how this might be achieved below:-
1) Homeowners do not receive tax relief of their mortgages at all. However, when they take a lodger into their home the first £7,500 of rent received is tax free. This should be extended to all rental properties, i.e. the first £7,500 from each unit upon which Council Tax is paid should receive the same £7,500 per annum tax free allowance.
2) When a homeowner sells their home the capital appreciation is not taxed. This should also be applied to each of their rental properties.
3) A homeowner is allowed £1million of IHT relief against the value of their home. This should be extended to equity in rental portfolios.
4) A homeowner is given the choice as to whether they should obtain a CP12 annual gas safety certificate. This should also be applied to tenants, not imposed upon landlords.
5) A homeowner is free to evict a lodger subject to providing “reasonable” notice, without having to refer to the Courts. This is very fair and prevents the Court systems from clogging. This should be extended to private landlords.
6) A homeowner is not required to protect a lodgers rent deposit in an approved government scheme. This should also be extended to private landlords.
7) Homeowners may choose to have as many people as they wish living in their home without the requirement to purchase a licence. If that home is considered to be overcrowded then Councils have the means to deal with that issue. The same rules should be applied to tenanted properties. Whilst the UK is subject to a Housing Crisis it is important to remember that every person needs a roof over their head. The finances of those people in need of accommodation dictates where they can afford to live. The solution to preventing over crowding and leaving people with no choice, other than to suffer in poor quality housing, is a simple one; provide them with affordable choices. The only reasons that people live in poor conditions is lack of choice and affordability. The cause of the problems associated with overcrowding, sub-standard and unsafe accommodation are quite obviously due to lack of choice. The solution to the problem is to increase supply of property, i.e. BUILD MORE!
8) Homeowners are not required to verify the legal rights to live in the UK of guests invited into their homes. Quite rightly, they leave this to the border agencies. The same should apply to landlords.
Every year that passes whereby Government allow new property development figures to fall behind the need for new housing should be considered a failure on the part of the Government. The blame for such failures should most certainly not be pointed back at society, or any section of it. Constant vilification of landlords is not addressing the true cause of the Housing problem, which is quite clearly the responsibility of Government . The only real power to control immigration and population growth rests with government, as does the development of additional housing.
I do not blame the current Government for the state of the Housing Market, only time will tell whether it is successful in solving the problem. The reason I voted for you, and the Conservative Party, is that I believe you provide the best hope of being able to solve the issues associated with the Housing Crisis and the economy. I have not judged you on the failures of all governments in the last three decades, I expect better of you.
Given that successive Governments have become so reliant on the Private Rented Sector I think the suggestions I have made above are fair. I sincerely hope you will agree and that you will also consider the following:-
1) It has become a lifestyle choice for several people not to own their own property, they prefer the flexibility associated with renting
2) Many people are reliant upon the PRS for work mobility reasons
3) A significant section of society are unable to obtain mortgage finance required to purchase their own home. This is due to being on low wages, in need of benefits so as not to be living below the poverty line or having a poor credit rating.
4) Government have stated they wish to reward hard working people by helping them to make provisions for their own future. Buy to let can be an effective strategy if it is not taxed and regulated into oblivion.
5) Government clearly acknowledge the UK has a ‘Housing Crisis’
My conclusion is that if Government are to be true to their word they must consider a root and branch overhaul of UK Housing and associated legislation and taxation policies.
Yours sincerely
Mark Alexander
Related Open Letters >>> http://www.property118.com/category/open-letter-to-mp/
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Dr Rosalind Beck
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Sign Up22:39 PM, 1st September 2015, About 9 years ago
Just a thought. If special rules apply to partnerships when trying to incorporate, what is the different status then between an 'individual' and a 'partnership' vis-a-vis the tax grab?
As part of a partnership I should be able to declare my business is not run by one 'individual.' And others could maybe turn their 'individual' businesses into 'partnerships.' I may be clutching at straws, but I've not seen this aspect debated yet.
Mark Shine
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Sign Up0:21 AM, 2nd September 2015, About 9 years ago
Reply to the comment left by "Roger Rabbit" at "01/09/2015 - 22:28":
Yes Roger, I agree with you. There are countless arguments as to why clause 24 is unfair and the unintended (or intended?) end result will be mainly to exert upward pressure on rental values rather than achieving what was indicated by GO during his speech. All things considered I think the sole trader vs Ltd (non-incorp vs incorp) arguments may be the strongest case for justice.
If the incorporated LLs are also on board, then the voice of reason is infinitely more likely to be heard @Westminster?
Roger Rabbit
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Sign Up1:12 AM, 2nd September 2015, About 9 years ago
Reply to the comment left by "Mark Shine" at "02/09/2015 - 00:21":
Yes the voice of reason is why do this to just one asset group held by one type of asset owner.
I suspect it may even breach some European or international laws (states are meant to not use tax or other powers to effectively steal assets from one group over another. So for example the state could set a 90% income tax if it was applied to everyone but it couldn't for instance set an income tax of 90% for just persons named John Smith .)
anyway the voice of reason argument is why do this to sile traders and not corps. Its simply not fair. I suspect if it was viewed like that they would drop it. But lets assume for a moment the government did apply it to corps. The next step os why only homes why not finance on everything? And if they tried to do that almlst all FTSE companies would go bankrupt overnight and take the banking system with it.
simply put sole traders are being specifically targeted and discriminated against because we are small weak dispersed group who haven't got the influence or financial to take this to court or to shame the government in the media.
it should simply be an argument of why discrimate against sole traders and small family businesses.
Also I suspect the treasury hasn't thought of the long term impacts. This change will force homes to be held in LTD companies. Long term that must surely mean less stamo duty take and less economic activity abd less owner occupation. Sole traders can only hold onto property for a finite time. A ltd company could hold onto a property for a thousand years. In sole traders hand it would have changed ownership 50-100 times paying stamp duty and agent fees and solicitors fees 50-100x.
These big companies will create a higher rented stock and a lower owner stock which is probably the reverse of what a government wants especially a conservative government. Look at germany biggest property owning company. A REIT with 300,000 properties. Doubt any/many owner occupiers will get a chance at them
Roger Rabbit
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Sign Up1:29 AM, 2nd September 2015, About 9 years ago
I would suggest that an open letter to the conservative party published in one of the newspapers might be an effective way to get the message across.
Keep it short and argue reason not emotion
Why discriminate against small sole traders. The rules should apply to corporates or neither (finance as a cost). And also highlight that the long term implications probably haven't been thought out at all. this change will push homes to be owned by corporates rather than sole traders in time
sole traders only own property for a finite time a corporate could own a home for a thousand years. The sole traders during that time may have sold the property 50-100x over paying 50-100x as much in stamp duty and creating 50-100x as much economic activity (eatate agents solicitors etc).
Dr Rosalind Beck
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Sign Up8:42 AM, 2nd September 2015, About 9 years ago
Reply to the comment left by "Roger Rabbit" at "02/09/2015 - 01:29":
I think letters to the letters pages would be good and that would be free, so no issue of trying to raise finance for an advert. Maybe someone can draw up something concise, which gets to the point and then as many as possible of us should send them to national and local papers, changing them a bit maybe, so that they don't look like template letters. I think that would be a really good contribution we could all make to the campaign this week. Maybe BTL or Appalled could do the letter or I will if they don't have the time (and mention the petition)?
Claire Oswald
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Sign Up12:34 PM, 2nd September 2015, About 9 years ago
Reply to the comment left by "Roger Rabbit" at "02/09/2015 - 01:12":
Interesting point about finance costs being disallowed as an expense against tax for all sectors. That would cause chaos, but it's a good arguing point.
I've sent a copy of the letter to my MP but not sure what good it will do.
Claire.
Dr Rosalind Beck
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Sign Up12:39 PM, 2nd September 2015, About 9 years ago
Reply to the comment left by "Claire Oswald" at "02/09/2015 - 12:34":
Hi Claire. Can you give me the name, party and constituency of your MP, as I'm keeping a reccy? Thanks.
Claire Oswald
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Sign Up13:16 PM, 2nd September 2015, About 9 years ago
Reply to the comment left by "Ros ." at "02/09/2015 - 12:39":
Hi Ros,
Bill Cash, Conservative, Stone constituency.
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Sign Up13:41 PM, 2nd September 2015, About 9 years ago
John Penrose, Conservative, Weston-Super-Mare
Dr Rosalind Beck
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Sign Up14:04 PM, 2nd September 2015, About 9 years ago
Thanks Claire and Jerry.