Landlords – Tell the Chancellor what should be done before the Autumn BudgetMake Text Bigger
HM Treasury has said it welcomes representations as part of the policy-making process and the views of stakeholders are gratefully received.
There will now only be one Budget each year held in the Autumn with a Spring Statement in 2018, but this will not be a major fiscal event.
Guidance has been issued by HM Treasury on how to submit a Budget representation with the aim of commenting on government policy and suggesting new policy for inclusion in the upcoming Budget.
Property118 Campaign Member, Dr Rosalind Beck, has made the following submission below and would encourage all Property118 readers to make their own or similar submissions.
Proposal for Budget to either:
(a) Scrap Section 24 of the Finance (no. 2) Act 2015; or:
(b) Make the measure only apply to new purchases.
The evidence for the need to scrap this pernicious measure is outlined in my report below:
1) There are many reasons why this bizarre tax on revenue (overturning the centuries-old principle that taxable profit = revenue – costs) should be scrapped, but perhaps the most pressing one in financial terms is that it will lead to high levels of homelessness amongst the worst-off in society. This is because it necessitates landlords maximising rents and evicting those with the fewest means to pay those rents. This is already occurring. Any revenue from this new tax levy which the Treasury expects to receive will be dwarfed by the costs of dealing with the homelessness which it will cause.
2) Ideally it needs to be completely reversed, but if this is felt to be undesirable for whatever reason, it should at least only apply to new purchases, in order for it to not be retroactive. Whilst this would mean that private landlords would not expand their portfolios (and therefore would not develop much-needed housing), it would not punish and in some cases ruin landlords’ businesses, livelihoods and pensions by retroactively taxing them (many landlords are effectively tied into their mortgages and cannot simply sell, so will have to deal with the new potentially infinite tax rates introduced by the measure).
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