Blaire argues that stopping landlords offsetting mortgage costs against income is in breach of human rights
The new law which starts in 2017 and will be in full effect by 2021 will remove the right of landlords to right off mortgage interest costs against income to reduce tax bills. The former prime ministers wife Cherie Blair is leading the fight against the government and chancellor George Osborne. The legal case is being funded by landlords using £50,000 of crowd funding.
The new law discriminates against small landlords with less than 15 properties. Property investors with more than 15 properties are exempt which many argue gives them an unfair advantage.
Omnia lawyers led by Mrs Blair QC have written to HMRX claim the move treated buy-to-let investors differently from other business owners, including large corporate landlords, who are allowed to offset costs against tax.
Omnia said this breaches the European Convention on Human Rights, adding that allowing corporate and overseas landlords to continue unaffected would ‘distort competition’ and that the move should not have been permitted without approval by the European Commission.
Landlords need to understand the risks involved if the fight against the government fails.