Buy-to-let landlords are calling for the tax relief changes on their properties to be reversed. Landlord and property investment specialist, Mark Homer, has set up an online petition calling for the reversal of the tax reforms. If the petition gets 100,000 or more signatures, than it will have to be debated in parliament. The government imposed a stamp duty levy on additional properties and restricted financial relief on mortgages, arguing that this would help first-time buyers get on the property ladder. It would make investment less attractive for landlords and, therefore, there would be lower demand and more properties on the market. However, the government still fails to take into account that many UK residents cannot afford the deposit needed to get a mortgage or simply have no interest in home ownership.

The petition, which runs until November 14, received a statement from the government in which it defended the tax changes. It says the relief changes were announced in the summer budget of 2015 in a bid to reduce the deficit. It felt that landlords had an advantage over homeowners in the property market and that income tax relief for the costs of finance are not available to homeowners. Landlords can still claim tax relief on their day-to-day running expenses such as replacing furniture and letting agent fees. The government argues that finance costs are different to these expenses because a landlord can buy a more expensive property, because he or she has a mortgage, and therefore can enjoy a larger gain on the investment than would have been possible without it.

HMRC estimates that one in five landlords will end up paying more tax because of the measures introduced. Although the government accepts that some of those affected will face difficult decisions, it has taken this into account by introducing the changes gradually. Income tax relief at the basic rate is still available for landlords’ finance costs. The restrictions are being phased in over four years which, the government argues, gives landlords time to make any necessary adjustments due to these changes. Because it only affects a small fraction of the housing market, it is not expected to have a major impact on house prices or rents, according to the government statement.

The government also introduced higher rates of stamp duty for additional properties. It has also increased the price at which a property becomes liable for stamp duty to £300,000 for first-time buyers. Anyone buying a first home worth between £300,000 and £500,000 will save between £3,000 and £5,000. Since the scheme was introduced, it has already benefited 69,000 people. The government expects that more than one million first-time buyers will benefit from this stamp duty relief over the next five years. This is all part of its commitment to boosting home ownership.

Furthermore, the government has taken action to help tenants get a fair deal, as well as to address the problems of homelessness and rough sleeping. In the last Autumn Budget, £2 billion of extra funds was made available for affordable housing, including social rented properties. This brings the Affordable Homes Programme’s total investment to more than £9 billion.

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