Iain Duncan Smith Has Spoken Out For Landlords

Iain Duncan Smith Has Spoken Out For Landlords

22:06 PM, 21st June 2017, About 4 years ago 163

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On Sunday 18th June 2017, Iain Duncan Smith was quoted by the Sunday Telegraph as saying ….

“Finally, it is time to look again at the way we treat private landlords who buy houses to rent. George Osborne’s decisions to impose a stamp duty levy on the purchase of homes to rent, to restrict mortgage interest relief to the basic rate of income tax and to tax a landlord’s turnover rather than profits have led to landlords scaling back or even leaving the sector altogether.
They are a significant provider of the additional housing we need. We should be encouraging them with devices such as VAT relief on conversions or even capital allowances, not punishing them. It’s no wonder buy-to-let purchases have fallen dramatically. If the purpose was to stop foreign owners buying up property and leaving it empty

…………………………………………………. We are in danger of throwing the baby out with the bath water.”



Comments

by david porter

20:50 PM, 10th July 2017, About 4 years ago

I have received a letter from the Treasury which says that only one in five landlords will be affected. I know this is wrong but what are the right figures?
Pls let me know?
I want to write back.

by Whiteskifreak Surrey

21:15 PM, 10th July 2017, About 4 years ago

Reply to the comment left by "david porter" at "10/07/2017 - 20:50":

I would have thought that line of reply will have be abandoned by now. Sadly it is not the case.

by Mike D

7:41 AM, 11th July 2017, About 4 years ago

David i also had a letter back from the Treasury, this was my 2nd after i originally complained through my MP at the start of this in 2016.
It mainly state to 'party' line as is stated time after time........i think from looking around seeing so many empty properties and busy auction rooms, that more 1 in 5 are selling, if the 4 in 5 aren't then hardly anyone is buying at present.
It states that the government does not expect it to have a large impact on house prices or rent levels.
It also mentions that originally the Irish government in 1988 had removed ALL tax relief for finance, but later reintroduced the relief but at a flat 80% cap on the amount of finance costs that get relief, while the UK has retained tax relief at the basic rate....in order to 'level the playing fields'
I wonder how many of these they are now sending out to meet the uproar from landlords?

They are definitely holding the line, so i guess it will only take a 'crisis' for them to change.....presumably greater than 1 in 5......
There are supposedly 4.5 million rented properties in the PRS with 1m landlords......of which 75% of landlords only have 1-2 properties, the presumption i think is that the 1 in 5 are BIG portfolio landlords, not incorporated, and i also presume only those with big LTVs.......we will see, but it doesn't look like that on the sales front to me!

by Grumpy Doug

11:51 AM, 11th July 2017, About 4 years ago

Reply to the comment left by "Mike D" at "11/07/2017 - 07:41":

I received much the same words (it was a letter from Jane Ellison, now ex-MP as she was booted out at the election). Maybe we'll see a different line of argument from Mel Stride ... my latest letter is currently with my MP so we shall see what the next tranche of sophistry from the Treasury awaits us.

by Gromit

12:16 PM, 11th July 2017, About 4 years ago

@Grumpy Dog
Don't hold your breath on that one. I've had a reply from "Mel Stride" who I wrote to soon after his appointment but I got the "standard" reply from a minion (virtually the same reply as I had from Jane Ellison, and David Gauke before her)
There are all just following the Treasury specious mantra -they 're now, I believe, defending their own poor research and trying to cover their a***es (buying time to get a job in another department or private firm, average term in the Treasury is 2 years so most will have moved on before Sec.24 has fully kicked in).

by david porter

13:21 PM, 11th July 2017, About 4 years ago

Reply to the comment left by "Barry Fitzpatrick" at "11/07/2017 - 12:16":

I replied to Jane E.
I have a property in her area and could have registered and voted there. I did not and told her so.
She is no longer an MP.

by Appalled Landlord

16:12 PM, 11th July 2017, About 4 years ago

Reply to the comment left by "Mike D" at "11/07/2017 - 07:41":

This disastrous policy was born out of a lie, was announced with a lie, and has been defended by government lies ever since.

Geographer David Kingman had uttered a preposterous lie in his propaganda “report”, published by the Intergenerational Foundation in November 2013, just after he graduated in Geography.
http://www.if.org.uk/wp-content/uploads/2013/11/Why-BTL-Equals-Big-Tax-Rip-off.pdf

He wrote “Landlords receive a public subsidy worth up to £5 billion in tax relief per year. This is relief that they are able to claim for their business expenses, including the 10% “wear and tear” allowance and interest relief on mortgages.” He recommended, among other things, that BTL mortgage interest be disallowed.

£5 billion was the amount that he calculated that landlords would have paid in EXTRA tax IF NO BUSINESS COSTS AT ALL HAD BEEN ALLOWED. Because no government had adopted the principle of taxing receipts instead of profits, Kingman described its absence as a public subsidy, in propaganda designed to mislead gullible people. It was a nonsensical lie.

The policy of disallowing interest is based on that lie.

Kingman’s recommendations were:

“Reduce the ability of landlords to deduct their mortgage interest against tax, because this allowance is regressive and distortive
Abolish the wear and tear allowance and only allow landlords to claim for individual items on a renewals basis
Greatly reduce the period of exemption covered by the 36-month rule on capital gains tax, ideally to as little as six months
Curtail lettings relief
Deduct capital gains tax at source during property transactions, as happens in other European countries (notably France)
Build more housing to reduce housing costs for young people”

All of these recommendations were adopted by Osborne except the fifth and sixth ones

When David Kingman was writing to the Treasury and writing his “report”, a certain John Kingman, History graduate, was the Treasury’s second most senior civil servant. He was Second Permanent Secretary to HM Treasury from 2012 until 2016. In October 2016 he became chairman of Legal & General, sponsors of Shelter and producer of Build-to-Rent modular homes designed to compete with individual landlords.

Natalie “Brainfade” Bennett included David Kingman’s recommendation about BTL finance costs in the 2015 manifesto of the Green Party - which has only ever had one MP .   Her car-crash interview about it can be heard on Youtube.  The current co-leader of the party, Jonathan Bartley, is still lying about the non-existent subsidy, most recently on Question Time just before the last election, when the Green Party’s tiny support dwindled further.

George Osborne stole the idea from the Green Party. It had not been in the manifesto that he had written for the Conservatives. There was no prior consultation with anybody who knew anything about the industry.

He lied shamelessly in the Summer Budget speech in 2015 when he announced the tax change, saying “For the wealthiest, every pound of mortgage interest costs they incur, they get 45p back from the taxpayer.” He made it sound as though landlords receive a public subsidy.

This lie would have been bad enough if he had said “45p from the government” - because landlords don’t get anything “back” from the government.

What made the lie worse was that it implied that landlords are not taxpayers - whereas landlords pay tax at up to 45% on their profits, just like any other individual in the country.

This budget speech came just weeks after Cameron had promised on TV that there would be no increase in income tax if the Conservatives were re-elected. Omnishambles U-turn Osborne, the most inept Chancellor in living memory, thus made a liar out of his boss.

Treasury Ministers and minions have been lying about the tax change ever since. They have to, because there is no justification for it. We know that it will have dire consequences because of the experiences in Ireland, where the tax authorities restricted the deductibility of finance cost twice, and had to reverse it each time.

The Treasury minions are currently lying that the changes in Ireland were worse than S 24.. In fact they were milder. The first time the change did not apply to existing rental properties. The second time, only 25% of interest was disallowed, so landlords paid extra tax ON 25% of their finance costs. Section 24 will mean that landlords in the UK will pay extra tax OF up to 25% of their finance costs. For a 40% taxpayer this is two and a half times as much.

The mathematically-challenged spiv who introduced S24 was sacked by Theresa May, who replaced him with Philip Hammond, who has not repealed it. They both know very well how S 24 will work because constituents have met them to explain it.

by NW Landlord

16:29 PM, 11th July 2017, About 4 years ago

The last 18 months has just made me realise how many lies these leeches tell. Only today Teresa may in her keynote speech saying the torys where on the side of the small businesses and entrepreneurs of this country who strive to drive our economy and offer valuable services totally the opposite of what they have done to our industry. Does anyone know if she actually knows about s24 wouldn't surprise me if she didn't

by Alison King

11:42 AM, 13th July 2017, About 4 years ago

Reply to the comment left by "NW Landlord" at "11/07/2017 - 16:29":

She does. Someone in my local Landlord group is in her constituency and had a long conversation with her about it, to which she appeared to listen attentively.
However I imagine she has more "important" things on her plate right now.

by Pamela Potter

12:39 PM, 13th July 2017, About 4 years ago

As per recommendations on here, wrote a letter to IDS thanking him for his article on Section 24, copied in the world and his wife, including Theresa May.

Just had a reply from Downing Street as follows:

"I am writing on behalf of the Prime Minister to thank you for the copy of your letter of 23rd June, addressed to Rt Hon Iain Duncan-Smith MP.

Mrs May appreciates the time you have taken to share your views".

At least I got an acknowledgment!!

Am now wondering what would happen if we all inundate Downing Street. Worth thinking about.

Pam


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