Landlords are 'up-in-arms' about a change to the tax system change which appears to break a long standing tradition of allowing businesses to claim tax relief on their loan funding.
The online campaign is on the Parliament website, in which landlords state:
?We operate as sole traders and incur costs in the course of running our business. The planned restriction will unfairly target us by preventing us from offsetting costs in the same manner as other sole traders. We ask that the planned restriction be reconsidered as it has unfair implications.?
Having reach the required minimum signature limit, the Government must now respond in a formal way.
The petition was set-up by London-based landlord Ruhal Uddin with the aim of persuading the Chancellor to change his mind and 'Reverse the planned tax relief restriction on individual landlords?.
Introduced in the Summer Budget last month, following a successful election victory by the Conservatives, the first all Conservative budget in over 19 years, sent shock waves through the landlord community by imposing the tax relief restrictions which were totally unexpected.
The Chancellor?s measures would restrict tax relief on mortgage interest payments and arrangement fees incurred when taking out buy-to-let mortgages to the basic rate of income tax, currently 20 per cent, for higher rate tax payers.
Although the measure will have a delayed introduction until April 2017 and then be phased in over four years, if introduced in the forthcoming Finance Bill, it will hit high and higher rate taxpayers hardest, and especially those who are landlords with large rental incomes and highly geared portfolios.
The government will now be forced to gather its arguments against the petition ahead of the presentation of the Chancellors Finance Bill in the coming weeks.
Should the petition go on then to achieve its target of 100,000 signatures before the deadline of January 26, it should then trigger a parliamentary debate, though from past experience this is not guaranteed.
The petition goes on to argue:
?The Institute for Fiscal Studies has stated, in response to the Budget, individual landlords are already taxed more heavily than other homeowners.
?The private rented sector is heavily reliant on individual landlords. The planned change is likely to result in higher rents due to landlords looking to offset higher tax liabilities.
?In some cases, employed individuals own buy to let properties as investments for retirement. The planned restriction would adversely and unfairly affect them.
If you would like to add your signature to this campaign, click here
The Residential Landlords' Association (RLA) launched a separate campaign, and a page full of tools to enable Landlords to lobby against the proposed tax changes announced by George Osborne in this year?s summer budget.
The webpage produced by the RLA lays out ways in which you can campaign against the measures along with the RLA itself, by contacting your local MP and signing the a petition on the Parliament website. The site also takes you to their tax calculator created by the RLA and Rita4Rent where you can work out exactly how the proposed MIR changes could affect your income.
The RLA has meetings set up with the Treasury and they are looking at putting together a proposal of alternative tax proposals to Number 11 on both Mortgage Interest Relief and Wear and Tear. They will be continuing to survey their members to monitor the impact of these changes and is asking for input so that they can present robust evidence to Government in their case against the changes.
- Campaign page
- Tax Calculator
- Petition: Reverse the planned tax release restriction on 'individual' landlords
The featured image above shows the House of Commons Library
Article courtesy of LandlordZONE