A campaign challenging the government’s decision to cut mortgage interest relief is looking to raise a further £250,000 to take the judicial review to court.
The campaign is holding a summit in London on 9 June to add to the £50,000 already raised and draw attention to the impact the legislation will have on landlords and tenants.
The challenge is being led by Cherie Blair and has been brought by landlords Steve Bolton and Chris Cooper.
Chancellor George Osborne announced plans to limit tax exemptions for landlords in the Summer Budget to the basic rate of tax, which is 20%.
Many buy-to-let investors are now considering leaving the sector as they fear letting out a property will become far less profitable when the reforms come into force in April 2017.
Property experts believe the changes could cause an increase in rents as landlords look to claw back the money lost or even lead to evictions.
A full application for a Judicial Review against Section 24 of the Finance (No. 2) Act 2015 was submitted in February and a joint Acknowledgement of Service was received from HMRC and the Treasury on behalf of the government.
The legal challenge is being made against the new policy on the basis that it breaches the European Convention on Human Rights.
Cooper and Bolton argue that the new policy overturns a fundamental business principle where income less costs equals profit.
This will result in some landlords who finance their business with mortgages paying tax despite making no profit on their letting business.
In addition, they say the government has also decided to exclude the most wealthy property landlords as well as institutions, corporations and overseas landlords.
Bolton, who founded Platinum Property Partners, said: “The days where nobody loves a landlord must come to an end. We need to unite to show that we will not accept the victimisation of landlords and tenants by the out of touch political elite. They are deluded if they believe that they will go unchallenged when trying to reclassify mortgage interest as anything other than a normal business expense.
“The Tenant Tax is wrong on every level and if we allow a normal business expense to become a taxable expense for landlords, who will be next? Corporate landlords? Shopkeepers? Small business owners? Anyone who has used finance to help expand their business?
“We want to show politicians, the media and the country at large that we truly are a force to be reckoned with.”
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