A better alternative to S24?

A better alternative to S24?

10:16 AM, 31st January 2017, About 7 years ago 69

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I was thinking about Section 24 and the news that Hammond recently commented that if we could replace the revenue expected from S24 he would consider its repeal. Revenue from S24 is due to be £665m/yr after the 4 year implementation, so I got my thinking cap on.

I came up with a 2% rental levy. Charged across the board on all revenue from residential property, it would have several advantages: A better alternative to S24

1. Could truly ‘level the playing field’ by being charged equally to mortgaged individuals, cash buyers, companies. Everyone would pay it equally and would know how much was expected of them in advance.

2. MUCH cheaper than S24 for mortgaged landlords, yet raises more money.

3. My calculations show that just over £803m would be raised – £150m+ MORE than S24.

4. Simple to calculate and without complications.

5. Does not increase rents by much if anything at all, and negates need for increased evictions, which saves public money elsewhere.

6. Shows we as landlords are willing to co-operate with govt aims if fair and proportionate.

My calculations are based on roughly 4.5m private rental properties generating an average of £744 a month. This figure goes up to £892 if you include London. The gross rental take is around £40.176bn a year (WITHOUT the extra from London!) so 2% is around £803m.

Can anyone spot the downsides? I’m sure cash landlords/foreigners/companies might moan, but if its applied to everyone there can be no claim of discrimination and everyone in property gets equally and proportionately targeted.

Please note I am NOT in favour of this, but as an alternative to S24 is it not worthy of consideration?

All comments welcome!


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Comments

Gromit

22:15 PM, 3rd February 2017, About 7 years ago

Reply to the comment left by "Jonathan James" at "03/02/2017 - 17:26":

It a been tried many many times in the 18 months since this measure was announced. Unfortunately Hammond May, Osborne & Cameron and their influencers all believe, hook line and sinker, the Treasury's sophistry that few LLs will be affected, it will be fairer, that there'll be no impact on rents or house prices. But then it might well be true in Alice in Wonderland.

Jonathan James

9:11 AM, 4th February 2017, About 7 years ago

Hi Barry - yes, of course I'm well aware of all the hard campaigning which has been done to no avail & am equally frustrated.

My suggestion was to react to Philip Hammond's admission - that he would drop S24 if he could match the tax take via another means - by questioning the size of the predicted tax take and yet again pointing out the devastation to come as landlords take the necessary steps to avoid its' impact.

Gary Lee

12:47 PM, 4th February 2017, About 7 years ago

Are we not in danger of missing the point here, if, and I quote "Hammond recently commented that if we could replace the revenue expected from S24 he would consider its repeal" then surely this is an outright admission that Section 24 was never about "levelling the playing" field for home buyers it was, is, and always will be a method of generating income. The only thing that appears to have changed is the Mr Hammond has now admitted it.

Chris Novice Shark Bait

13:15 PM, 4th February 2017, About 7 years ago

The work has already been done. No need to re-invent the wheel at all. There were some excellent submissions made against the Finance Bill in Sept/Oct 2015 many of which had a multitude of alternative suggestions all on public record. Why not firstly ask Philip Hammond to read them. I am sure he most probably has not.

Jamie M

13:38 PM, 4th February 2017, About 7 years ago

Theft

kay Chas

13:45 PM, 4th February 2017, About 7 years ago

Mark, you are so right,
Feeding the Chancellor with another way to extract money from us, with an apparent nod from Landlords, would be disastrous!
This option would net money from ALL of those not affected by s24, the little man not reaching the 40% threshold too!
Unbelievable.

Whiteskifreak Surrey

19:52 PM, 5th February 2017, About 7 years ago

Just heard and subsequently read on BBC website:
http://www.bbc.co.uk/news/uk-politics-38873524

Is there a change of tune? Perhaps those who have any influence with Barwell & Co can lobby with them? They really should help private LLs, not to remove them from the market. I heard him saying that he will bring new big players in, though

Mandy Thomson

8:46 AM, 6th February 2017, About 7 years ago

Reply to the comment left by "Simon Griffith" at "31/01/2017 - 10:48":

Yes, and there is also the political kudos of being seeing to be on the side of first time buyers and renters by addressing the perceived "unfair mortgage relief advantage" that landlords "enjoy".

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