Clause 24 response from Tim Loughton MP

Clause 24 response from Tim Loughton MP

10:12 AM, 28th September 2016, About 8 years ago 55

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This is the response I received from my local Conservative MP from East Worthing, who obviously is another one who doesn’t understand the Bill and its implications:tim

Dear Mr…

Thank you for contacting me about changes to the taxation of landlords.

I am passionate about helping small businesses thrive. But this needs to be balanced against the interests of the wider economy including home ownership rates, a fairer tax system and mitigating against any future risks.

The Bank of England outlined two risks from high and rising levels of household indebtedness: a direct risk to UK banking system, and an indirect risk to economic stability. The Government is working hard to restore this country’s economic stability and the measures you talk about will help achieve this. With the above in mind I think it is right that the Government restricts the tax relief that landlords of residential property can get.

The current tax system supports landlords over and above ordinary homeowners, with tax relief particularly benefiting wealthier landlords with larger incomes. Every £1 of finance cost they incur allows them to pay 40p or 45p less tax.

The Changes to Mortgage Interest Relief do not tax landlords on turnover as opposed to profit. Rather, they remove mortgage interest from what is qualified as ‘allowable expenses’. Maintenance and repairs (along with agents’ fees, legal fees, insurance, utilities, and service charges) are all still ‘allowable expenses’ and thus still tax deductible.

Changes to Stamp Duty Land Tax are part of the Government’s strategy to improve home ownership. It cannot be right that in many areas local people are being priced out of a home. Many second homes are cash purchases that aren’t affected by the restrictions on mortgage interest relief; and many of them are bought by those who aren’t resident in this country.

Less than 1 in 5 individual landlords are expected to pay more tax as a result of the restriction to Mortgage Tax Relief. Furthermore, this change is being introduced gradually from April 2017 over 4 years. This will give landlords time to plan for and adjust to these changes.

Thank you again for taking the time to contact me.

Yours sincerely

Tim Loughton MP
Member of Parliament for East Worthing & Shoreham


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Comments

Chris Clare

11:14 AM, 29th September 2016, About 8 years ago

Reply to the comment left by " " at "28/09/2016 - 23:31":

Hi Rosalind I more than happy with you using my comments. Feel free to get in touch if you need anything further.

Joe Galvin

11:36 AM, 29th September 2016, About 8 years ago

Reply to the comment left by "Old Mrs Landlord" at "29/09/2016 - 07:28":

It has already started I have a colleague from EE and they are already struggling to find replacements for their HMO - first time in a decade. They've actually ended up handing in their notice and as they cant afford to rent alone more likely than not they will leave UK too.

In 2008 all currencies bottomed but now it's different, it is only the GBP so they are better off moving to continental eu + it is much closer to their home land too. So don't have high hopes of rent raises - at least in the SE - in my example above their landlord will be happy to find another tenant...

Old Mrs Landlord

7:28 AM, 30th September 2016, About 8 years ago

Reply to the comment left by "Joe Galvin" at "29/09/2016 - 11:36":

I will monitor local developments in this regard, but it would not surprise me if the scenario you describe is, like so many other aspects of housing, a London area scenario and not reflected everywhere in the country. Obviously I'm not saying the effects of relative currency values are local, but the enormous variation in housing and employment markets is frequently not appreciated by commentators, particularly the politicians who make the policy. We have a couple of properties which we would struggle to sell for our purchase price and for which the rents have not increased in eleven years, so in real terms are well down while all running costs have increased. (These properties are not in the north east.)

ld s

Old Mrs Landlord

7:35 AM, 30th September 2016, About 8 years ago

Reply to the comment left by "Joe Galvin" at "29/09/2016 - 11:36":

I will monitor local developments in this regard, as the example I gave was from before the Brexit vote. However, it would not surprise me if the scenario you describe is, like so many other aspects of housing, a London area scenario and not reflected everywhere in the country. Obviously I'm not saying the effects of relative currency values are local, but the enormous variation in housing and employment markets is frequently not appreciated by commentators, particularly the politicians who make the policy. We have a couple of properties which we would struggle to sell for our purchase price and for which the rents have not increased in eleven years, so in real terms are well down while all running costs have increased. (These properties are not in the north east.)

Jonathan Clarke

8:40 AM, 30th September 2016, About 8 years ago

Reply to the comment left by "Mark Alexander" at "29/09/2016 - 09:16":

Hi Mark

Fair enough.
It is a really slog to organise stuff on such a large scale.
And you have done more than your fair share to shout this and other worthy causes from the rooftops .
Hopefully someone reading with the necessary skills and motivation may take up the gauntlet. Even if it pilot small scale operation which gains publicity to fuel the fire that may be enough. Or a countrywide blanket sec 21 day even as a publicity stunt is perhaps all that is needed to raise awareness to a larger audience

An analyst then could prepare a projected effect on the country if we all did not withdraw the sec 21`s within the 2 months timescale . The social disruption would be considerable. I`m not a militant but the Miners faced up to Maggie in the 80`s and caused serious problems. And much more recently the rather genial passive junior doctors who could hardly be described as hard core left showed the power of disruption when they felt they were being dealt an unfair hand but the government just decides to steamroller its policies through.

Maybe when the first increased tax bills land on the doormat then the up to now blissfully unaware landlords will come on board in a second wave click onto 118 and join the battle. People power changes policy.

Mark Alexander - Founder of Property118

8:48 AM, 30th September 2016, About 8 years ago

Reply to the comment left by "Jonathan Clarke" at "30/09/2016 - 08:40":

Hi Jonathan

I agree that the first wave of tax bills in Jan 2019 hold be a breaking point for many if s24 ever gets that far. Meanwhile we still have plenty of fight left in us and several campaign strategies to deploy which are affordable based on the resources we do have available to us.

Watch this space!
.

Michael Barnes

21:09 PM, 30th September 2016, About 8 years ago

Reply to the comment left by "Jonathan Clarke" at "29/09/2016 - 08:58":

The links did not work for me in the Microsoft browser, but were fine in Google Chrome.

Michael Jones

9:36 AM, 1st October 2016, About 8 years ago

Fiscal Policies of the UK Government as written by friends of the ex Chancellor , leave funding to be obtained from new sources not limited to Crowd Funding and the Bank of Mum and Dad to support the UK economy. It is evident that the UK Government will in 2017 be taking money away from the landlord in two ways namely, the availability of funds as well as the intended S.24 rules. To date, MP's nor the Bank of England has not appeared to be astute enough to question the Government on these rules. Long live the Queen !

Blodwyn

10:07 AM, 1st October 2016, About 8 years ago

Now you understand why so many say MPs are MPs because they are basically unemployable in any job where they have to think for themselves! So they opt for parrotlife and toady-jogalong.

Jonathan Clarke

13:20 PM, 1st October 2016, About 8 years ago

Reply to the comment left by "Michael Barnes" at "30/09/2016 - 21:09":

Thanks I`ve accessed these now . Yes MP Shailesh Vara is in complete denial so I will enlightened him with my experiences.
shailesh.vara.mp@parliament.uk;

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