The fight against the proposed tenant tax continues, with the National Landlords Association launching a new campaign to lobby the Treasury to try to get it to back down. The NLA says that there is a new chancellor and they need everyone’s help to lobby him on Section 24 of the Finance Act 2015.
Landlord and property management associations have been taking action since the proposed tax was announced. They argue that it could force landlords to sell up or increase rents for tenants to offset the additional expense, and that it is biased against landlords, because other businesses will still get mortgage tax relief. Treasury officials have told landlords they cannot imagine the impact this tax will have on tenants, according to the NLA. So the association is making it simple for them by drawing a picture showing possible effects, and then sending them the image as an e-postcard. The idea is for the Treasury to be inundated with postcards pointing out the effect on tenants and landlords.
All landlords can get involved, by choosing the image they want to send, filling in their details and submitting it. There is a choice of two postcards with the hashtag #ReThinkTenantTax. The first shows a happy family being painted out of the picture by a tough-looking tenant tax man, while the second shows people fleeing their houses and being stamped out by giant tenant tax footsteps. Any replies from the Treasury will be sent direct to you. The campaign is timed to lead up to Chancellor Philip Hammond’s first Autumn Statement on November 23. NLA chief executive officer, Richard Lambert, says this provides an ideal opportunity to point out that the proposed tax changes will make housing problems even worse.
Buy-to-let landlords will no longer benefit from the generally accepted accounting principle, where income minus costs equals profit. Section 24 means many landlords will pay 20% or more extra tax on their annual mortgage interest and other costs, which could be greater than their actual profit. The tax change will affect about 44 per cent of landlords paying the basic rate of tax, by forcing them into a higher bracket. This could result in them selling up or increasing rents. The NLA wants the government to only apply the rules to new buy-to-let loans taken out from April next year, rather than applying it retrospectively.
More information is available on the website: www.rethinktenanttax.org.