Landlords in last-ditch challenge to get Chancellor to change his mind on new tax regime

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A last-ditch plea has been tabled to Chancellor Philip Hammond before tomorrow’s (Wednesday) Budget.

The Residential Landlords Association wants him to ditch the impending tax change whereby landlords will no longer be able to offset mortgage interest costs against tax.

The RLA has challenged the Government’s reasoning.

In a recent statement in Parliament, a Treasury minister, Jane Ellison, argued that plans to restrict mortgage interest relief for landlords “will reduce the tax advantage landlords have over home owners in the property market”.

But Alan Ward, chairman of the RLA, said this assertion was rejected last year by the Institute for Fiscal Studies, which said that the tax system “is not, and was not, even before the recent changes, more generous to people buying to let”.

Ward said: “We are now weeks away from a tax change that risks investment in homes, and will cause considerable hardship for tenants.

“It is troubling that ministers have not published any evidence to back up their assertions that landlords are taxed more heavily than home owners. This is no way to make policy.

“We call on the Government to use tomorrow’s Budget to halt its planned tax changes which will do little to provide the new homes to rent they claim to want.”

The call comes as analysis by London estate agents Portico shows that despite evidence showing that increasing numbers of landlords are incorporating to mitigate the changes, this may not be the best option.

The agent’s analysis highlights that while the mortgage interest relief will be preserved for landlords operating as companies, commercial mortgages generally have higher rates than buy-to-let deals, while there are also the costs of setting up the business and maintaining reporting obligations such as annual corporation tax returns.

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Written by: Houseladder