Keeping the momentum going against Section 24

Keeping the momentum going against Section 24

9:29 AM, 13th December 2016, About 6 years ago 61

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I have decided to adopt a policy of making myself a complete pain in the backside and try to create as much noise around this subject as possible. Not sure it will work but it’s better than sitting around waiting for the inevitable.momentum

I have written to my local MP Caroline Dineage and have received the following response. I was wondering if anybody, who knows more about the subject than I do, could help me to fashion my next response to what I consider to be a bog standard misinformed piece of nonsense. I would like to go back with as much fact as possible to argue against each of her points. I can do the research and thinking on my own but 10,000 heads are better than one and wondered if anybody had any ideas or information that dispels the figures/information she is quoting?

I have also written to each member of the select committee on housing which met last week and will be responding to what I strongly suspect will be a very similar email reply from each of them:

“Thank you for your e-mail. I am very sorry for my error in sending a response to you regarding letting agent fees rather than mortgage interest relief. I have been receiving a great deal of correspondence on these two issues and inadvertently confused your e-mail with another.

As a former business-owner myself, I am passionate about helping small businesses thrive and fully appreciate your concerns about this policy proposal for the viability of your business.

The reason for these reforms is that the Government feels that the interests of the professional rented sector need to be balanced against the wider interests of the economy, including home ownership rates, a fairer tax system and mitigating against any future risks.

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’. I think it is important to note that maintenance and repairs, along with agents’ fees, legal fees, insurance, utilities, and service charges, are all still ‘allowable expenses’ and thus still tax deductible.

I appreciate you feel this could cause many private rental businesses to fold, but I would stress that less than 1 in 5 individual landlords are expected to pay more tax as a result of the restriction to Mortgage Tax Relief. Furthermore, I would assure you that this change is being introduced gradually from April 2017 over 4 years, giving landlords time to plan for and adjust to these changes.

While I appreciate you might find this response disappointing, I hope it goes some way to explaining the Government rationale on this issue.

Thank you once again for taking the time to write to me on this important issue.

Kind regards
Caroline”

Any guidance, info, statistics, quotes, etc. to make it harder to argue against us would be very much appreciated.

Regards

Pam



Comments

H B

17:48 PM, 1st January 2017, About 6 years ago

Reply to the comment left by "Alex Caravello" at "23/12/2016 - 18:07":

"Make sure you ram this down anyone’s throat that compares investing in property to investing in shares as an argument to support Section 24!"

I have just read the relevant section on the HMRC website. It does not make the purchase of ordinary shares tax deductible, unfortunately.

https://www.gov.uk/government/publications/interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-hs340-self-assessment-helpshee/hs340-interest-and-alternative-finance-payments-eligible-for-relief-on-qualifying-loans-and-alternative-finance-arrangements-2015

Alex

18:35 PM, 1st January 2017, About 6 years ago

It allows for finance costs to be tax deductible when buying shares in a company that you have a 'relationship' with. These scenarios are akin to owning buy to let property, i.e. owning a reasonable share of the company (property), or working in the company (property).

You may be able to claim relief for interest paid or for alternative finance payments where the loan or alternative finance arrangement is used to:
•buy ordinary shares in, or lend money to, a close company in which you own more than 5% of the ordinary share capital on your own or with associates
•buy ordinary shares in, or lend money to, a close company in which you own any part of the share capital and work for the greater part of your time in the management and conduct of the company’s business, or that of an associated company
•acquire ordinary share capital in an employee controlled company if you are a full-time employee – we regard you as a full-time employee if you work for the greater part of your time as a director or employee of the company or of a subsidiary in which the company has an interest of 51% or more

Luke P

18:36 PM, 1st January 2017, About 6 years ago

So do we live in a free-market capitalist economy or not? I wish they'd make their bloody minds up.

terry sullivan

19:04 PM, 1st January 2017, About 6 years ago

Reply to the comment left by "Luke P" at "01/01/2017 - 18:36":

gideon was/is a real s**t--having a trust fund and being an irish peer helps a lot!

Luke P

9:53 AM, 2nd January 2017, About 6 years ago

Reply to the comment left by "terry sullivan" at "01/01/2017 - 19:04":

Oh for sure. He's possibly the worst UK politician history has ever seen. I'd rather Gordon Brown than him.

Whiteskifreak Surrey

13:44 PM, 9th January 2017, About 6 years ago

We were waiting long enough, but since there is no hope for S24 to be abolished, we must increase our rents. The Tenants are excellent and we really do not want to do this, but we will be affected by S24.
Do you (or anyone else, good people here) happen to have a good template of:
1. a letter to the tenants explaining what has happened and why the rent MUST rise
2. a template of a letter to the local MP, which can be supplied to the tenants asking them to write to their MP?
3. any other document any of you plan to send to tenants?
I know that there were templates here already published, however it was some time ago and they might not be quite suitable in the recent circumstances and (hopefully) raising awareness of the tenants.
Thank you very much in advance.
Whiteskifreak

H B

20:12 PM, 9th January 2017, About 6 years ago

Reply to the comment left by "Whiteskifreak Surrey" at "09/01/2017 - 13:44":

There are some good templates knocking around, but the best way is to show the actual impact it is having on your finances.

Obviously with rents falling in many areas and with about half of all the PRS without any mortgage at all, we should take some care about pushing costs through too quickly.

When one of my two properties next comes up for rent, I will adjust upwards, but only up to current market value.

Whiteskifreak Surrey

8:20 AM, 10th January 2017, About 6 years ago

A good article in today's "City am":

http://www.cityam.com/256692/why-solving-countrys-housing-crisis-means-backing-not

Rare support for private Landlords. "I still find it strange that Britain’s best and most effective form of housing provision, the private rented sector, is coming under such consistent attack." - the author starts...

Ian Narbeth View Profile

14:59 PM, 11th January 2017, About 6 years ago

Reply to the comment left by "Simon Hall" at "01/01/2017 - 17:05":

I have only just seen this thread. The article is not about BTL. It says: "Earlier this year it emerged second home owners in the south-west may be asked to pay a “guilt tax” to help locals priced out of the property market."
There is a case that second homes which are only used at weekends and for the odd holiday DO contribute to the housing shortage. One family is using two homes. That is quite different from BTL landlords who strive for 100% occupancy. BTL landlords do not contribute to the housing shortage, they help the situaton by bringing properties into use and maintaining them to far higher standards than the average householder.

Simon Hall

16:18 PM, 11th January 2017, About 6 years ago

Reply to the comment left by "Ian Narbeth" at "11/01/2017 - 14:59":

Thanks Ian for putting me straight.

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