A growing number of Conservative MPs are beginning to rebel over next year’s cut in mortgage tax relief, according to a leading industry body. The Residential Landlords’ Association said at a summit to draw attention to the buy-to-let tax changes announced in last summer’s budget that a growing number of Conservative MPs were now willing to speak […]
A growing number of Conservative MPs are beginning to rebel over next year’s cut in mortgage tax relief, according to a leading industry body.
The Residential Landlords’ Association said at a summit to draw attention to the buy-to-let tax changes announced in last summer’s budget that a growing number of Conservative MPs were now willing to speak out against the government.
David Smith, policy director for the Residential Landlords Association, said: “A large number of backbench MPs have started to wake up to this issue and realise that it is not actually a very Conservative policy. It is somewhat anti-Conservative to tax small businesses, especially when large corporations are not being taxed.
“It has been very difficult to get members to speak out aggressively and break ranks. However, there is some movement on that and it is probable you will start to hear some things on that in the next few weeks.”
He pointed to a recent article on the Conservative Home website by MP for Clwyd West Dave Jones criticising the “assaults on landlords” through the tax system.
Smith said: “There is a slow level of interest among backbench MPs. We think this is particularly important as it is possible by the end of June the Chancellor may have different views about his future political career and feel in need to garner more backbench MP support than he perhaps enjoys at the moment.”
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.
Also speaking at the summit was Lord Flight, who has been an outspoken critic of the change to mortgage tax relief.
Lord Flight said: “I was horrified last year when the government came out with the proposals. The whole is project is misconceived and will be hugely damaging to the supply of accommodation and grossly unfair on small landlords.
“The government should be thanking buy-to-let investors for the supply of houses on the rental market, especially for the young.
“It is madness to discourage buy-to-let investors and is completely against Conservative Party principles.”
The Tenant Tax Summit in London was organised by landlords Steve Bolton and Chris Cooper, two co-claimants looking to secure a judicial review against the government over its changes to mortgage tax relief in the Section 24 of the Finance (No. 2) Act 2015. The judicial review challenging the move is being led by Cherie Blair.
Cooper and Bolton argue that the new policy overturns a fundamental business principle where income less costs equals profit.
The campaign is looking to raise £250,000 to take the judicial review to court and is well on its way to the target with nearly £100,000 raised so far.
Bolton said: “Not one document from the government is an impact assessment on tenants. If interest rates go up, landlords will be taxed even more. And this is from a government that wants to solve the housing crisis. It’s a double whammy.
“This is about protecting our livelihoods, protecting the UK housing market and protecting our tenants.”
The campaign also received a boost with a £10,000 donation from the National Landlords Association.
A decision on whether the case goes to a judicial review is expected later this month.
