A Level Playing Field Between Homeowners and Landlords

by Mark Alexander

3 years ago

A Level Playing Field Between Homeowners and Landlords

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A Level Playing Field Between Homeowners and Landlords

This is my third Open Letter to Mr George Freeman MP – Conservative, Mid Norfolk Level Playing Field Between Homeowners Landlords

A Level Playing Field Between Homeowners and Landlords

Dear Mr Freeman

A response was received this week to the petition to Government regarding the restrictions of finance cost relief to individual landlords. The key message seems to be that Government wishes to “level the field” for homeowners and landlords. I have given that a lot of thought, and on reflection I think I may have been wrong all along. I now agree the playing field should be levelled. I have listed how this might be achieved below:-

1) Homeowners do not receive tax relief of their mortgages at all. However, when they take a lodger into their home the first £7,500 of rent received is tax free. This should be extended to all rental properties, i.e. the first £7,500 from each unit upon which Council Tax is paid should receive the same £7,500 per annum tax free allowance.

2) When a homeowner sells their home the capital appreciation is not taxed. This should also be applied to each of their rental properties.

3) A homeowner is allowed £1million of IHT relief against the value of their home. This should be extended to equity in rental portfolios.

4) A homeowner is given the choice as to whether they should obtain a CP12 annual gas safety certificate. This should also be applied to tenants, not imposed upon landlords.

5) A homeowner is free to evict a lodger subject to providing “reasonable” notice, without having to refer to the Courts. This is very fair and prevents the Court systems from clogging. This should be extended to private landlords.

6) A homeowner is not required to protect a lodgers rent deposit in an approved government scheme. This should also be extended to private landlords.

7) Homeowners may choose to have as many people as they wish living in their home without the requirement to purchase a licence. If that home is considered to be overcrowded then Councils have the means to deal with that issue. The same rules should be applied to tenanted properties. Whilst the UK is subject to a Housing Crisis it is important to remember that every person needs a roof over their head. The finances of those people in need of accommodation dictates where they can afford to live. The solution to preventing over crowding and leaving people with no choice, other than to suffer in poor quality housing, is a simple one; provide them with affordable choices. The only reasons that people live in poor conditions is lack of choice and affordability. The cause of the problems associated with overcrowding, sub-standard and unsafe accommodation are quite obviously due to lack of choice. The solution to the problem is to increase supply of property, i.e. BUILD MORE!

8) Homeowners are not required to verify the legal rights to live in the UK of guests invited into their homes. Quite rightly, they leave this to the border agencies. The same should apply to landlords.

Every year that passes whereby Government allow new property development figures to fall behind the need for new housing should be considered a failure on the part of the Government. The blame for such failures should most certainly not be pointed back at society, or any section of it. Constant vilification of landlords is not addressing the true cause of the Housing problem, which is quite clearly the responsibility of Government . The only real power to control immigration and population growth rests with government, as does the development of additional housing.

I do not blame the current Government for the state of the Housing Market, only time will tell whether it is successful in solving the problem. The reason I voted for you, and the Conservative Party, is that I believe you provide the best hope of being able to solve the issues associated with the Housing Crisis and the economy. I have not judged you on the failures of all governments in the last three decades, I expect better of you.

Given that successive Governments have become so reliant on the Private Rented Sector I think the suggestions I have made above are fair. I sincerely hope you will agree and that you will also consider the following:-

1) It has become a lifestyle choice for several people not to own their own property, they prefer the flexibility associated with renting

2) Many people are reliant upon the PRS for work mobility reasons

3) A significant section of society are unable to obtain mortgage finance required to purchase their own home. This is due to being on low wages, in need of benefits so as not to be living below the poverty line or having a poor credit rating.

4) Government have stated they wish to reward hard working people by helping them to make provisions for their own future. Buy to let can be an effective strategy if it is not taxed and regulated into oblivion.

5) Government clearly acknowledge the UK has a ‘Housing Crisis’

My conclusion is that if Government are to be true to their word they must consider a root and branch overhaul of UK Housing and associated legislation and taxation policies.

Yours sincerely

 

Mark Alexander

Related Open Letters >>> http://www.property118.com/category/open-letter-to-mp/



Comments

Shakeel Ahmad

3 years ago

@Mark,
While I agree with your tactical change of directions.

I feel that this will only confuse them for reasons that very few of them would have read our correspondence to them, most of them will not have the desire or IQ to grasp the impact & its consequences and the remaining would have been asked to follow the party line.

May, I use your letter to forward it to my MP ?

NW Landlord

3 years ago

Great letter mark probably get a similar response to that of the petition unfortunately I've just spent the morning paying my council tax on my void properties yet another 'fair' policy by the government

Jerry Jones

3 years ago

Nice one - I may well return the compliment and nick it for my MP 🙂
If it's not too late, route needs to be root in the penultimate line.

Anne Nixon

3 years ago

Excellent letter Mark, which clearly highlights the double standards in the alleged wish to level the playing field.

Lets hope the irony is not lost on them!

Shakeel Ahmad

3 years ago

I am well aware that the Government is short of cash. This does not mean that the well established rules of taxation are torn apart for one sector of the economy & further not tax one entity i.e. LTD. The other i.e. fairness & making these changes retro.

In regards to the petition as being a PR. I'snt the whole Parliement is a PR exercise ?

I am in favour of paying down our OD. This does not have to be done in three years and not at the expense of one sector as it seems that only 19% of the landlords have a mortgage so it has been done at their expense & why not landlords who do not have a mortgage than should not be allowed to offset their say service charges.

In my email exchanges with Megan at the HMRC. It also came to light that all finance cost will not be allowed i.e. if you have taken a Bank loan to purchase carpet, furniture. This interest will also be not allowed.

A very large number of landlords underpins the hosing shortage, provides value for money & have a great relationship, communication with their tenants. I feel RLA & bodies has to get this message across as this is a good time to look at our sector while the focus is on us.

Mark Alexander

3 years ago

I happy VERY happy for anybody to use any text published on Property118.

It all 21,000 + people who have signed the petition to date take the time and effort to write to their MP's then we stand a far better chance of the "Alice in Wonderland" tax being reconsidered.

The reasons I am publishing the letters I am sending to my MP is to inspire others to do the same, and in the hope that the media will also pick up on them.
.

Mark Shine

3 years ago

I did raise the point about applying the same ‘relief’ measure to staffing costs when met my MP last week. He fobbed it off and said nothing to do with them as staffing costs are now paid via IPSA. I responded with something like – that may be so, but staffing costs are still the largest expense that an MP requires regardless of how payments are technically made (direct or indirect).

Another point he raised was this reduction in tax relief will affect many MPs who are landlords. I responded saying yes, but this was not their primary function etc…

I very much felt that he was seeing me with his treasury hat on (and toeing the party line) rather than as my local MP, listening to one of his constituents concerns and facts.

We'll see..

Gary Dully

3 years ago

Mark, I totally agree with what you have written, but it appears to display a bit of defeatism and I can't allow your resolve to be diminished.
We are right behind you, (we have nowhere else to go)

MP' s will never listen to us unless they are in danger of looking like fools.

For that to happen , attack through your tenants, solicitors and accountants governing bodies.
Eg:
Osborne declared an idiot by your local accountant, thanks to "Clause 24"
Immigrants will flood the streets because of Osborne's "Clause 24"
HMRC about to tax to death Private tenants and their kids under "Clause 24"
Osborne now sanctions double taxation against tenants under "Clause 24"
HMRC has become Tory Party political attack dog via "Clause 24"
Private Tenants to be taxed more than Osborne's Family Business under "Clause 24"
HMRC plan to smash Private Rental Sector into oblivion under "Clause 24"
All Alzheimer's sufferers face massive rent rises under "Clause 24"
Tenants on tags to be taxed through the back door under "Clause 24"
Drug addicts to face eviction under "Clause 24", it's more tax or a fix" says HMRC
Councils warned about future B&B cost explosion caused by "Clause 24"
Private Landlords and Tenants classed as second class citizans under "Clause 24"
Osborne promised to smash up BTL industry under "clause 24" for his "rich friends" before the election.
Mugabe would be proud of "Clause 24", says Letting Agencies trade body
Adolf Hitler Turned down "Clause 24" but Osborne to persecute Private Tenants through their landlords anyway.
Infinite Tax Rates now the "Norm" under "Clause 24", described as pathetic by industrial leaders.
Infinate rent rises coming in London under HMRC' "Clause 24"
Muslim tenants targeted by Osborne under "Clause 24"
Nurses can't afford homes in London thanks to Tories "Clause 24"
Tory party spin doctors try to defend "Clause 24"
Paxman to come out of retirement to question Osborne about "Clause 24"
Gas Safe Engineers to face the sack under "Clause 24"
Water companies concerned about "Clause 24"
Resteraunt staff can't find houses under " Clause 24"
Hospital workers to be hit hardest Under "Clause 24"
Osborne can't become PM with "Clause 24"
Obese Tenants attacked by Tories "Clause 24"
Plumbers face dramatic income drop from "Clause 24"
No new boilers for private tenants thanks to "Clause 24"
Private Polish tenants To be persecuted by Tories under "Clause 24"
Romanian private tenants to take place of English Benefit Claimants under "Clause 24"
Thousands of Evictions looming under Tory Governments " Clause 24"
Gipsy campsites taxed less than Private Tenants under "Clause 24"
First time buyers excluded from landlord repossessions thanks to "Clause 24"
Lenders cannot afford to offer refurb cash under " Clause 24"
BTL mortgages will never be repaid thanks to Osborne's "Clause 24"
BTL mortgages will all default due to "Clause 24", withering verdict on Osborne's hidden tax levy.

You can easily draw up a few hundred of these headlines, just in time for the new session of parliament and Christmas.

We need a downloadable headline database for 118 members, where they can do a write up on a specific area of people being affected.
A bit like a shopping cart, once purchased for say £1 its gone!
Ask that member to do a release within a week of purchase or they get a bill for £20 to a suitable charity. (Landlord benevolent fund) via PayPal.

Get the article proof read by a few members, touched up, remove the word landlord,to be replaced by another suitable member of society)
Then that press release could be channelled through the appropriate body for that type of tenant.
That way your using leverage of other peoples concerns.

The golden rule is that the word "Landlord" should not be in the headline and the point that "Private Tenants will pay the levy and not the landlord" be somewhere in it.

It will soon spread like wildfire, but even if it didn't,at least you can later justify massive rent increases that will be required just to stand still.

We are all bright, intelligent people, but stop trying to be logical with a politician it will NEVER work.
Remember "fracking or GM Crops"? an industry beset by fear of Death and poisoned water.

We need the same, but stop talking about our predicament, talk about your suppliers and customers.
Then should we fail, the government should take the rap, not us.

Dr Rosalind Beck

3 years ago

Reply to the comment left by "Gary Dully" at "29/08/2015 - 12:06":

I have just drafted a letter I want to send to the Daily Express, as I think theirs is the publication which would most like Gary's headlines - I've selected my favourites. I'll wait a bit before sending in case anyone wants to suggest some amendments. Also, maybe Mark can suggest which links I should provide - I'm thinking 'saynotogeorge,' Richard Dyson's articles, letters 2 and 3 to George Freeman and the petition. Any suggestions for any others?

'To whom it may concern
I write as a landlord facing bankruptcy because of George Osborne’s decision to impose potentially infinite rates of tax on landlords. This is variously being called the ‘Alice in Wonderland Tax’ the ‘buy-to-let tax grab’ and a ‘truly bonkers tax, a tax you’d laugh at – if it were being applied in a Third World country by a lunatic dictator.’
However, not everyone has understood that this is the new law coming in in November when the Finance Bill receives Royal Assent. According to ‘Clause 24’ of the Finance Bill, landlords will be taxed on turnover – a concept unheard of in taxation law. Landlords who pay out huge amounts of interest to mortgage companies (whilst providing essential housing to millions of tenants in the UK), are now deemed to be the ‘wealthiest landlords’ by George Osborne (a bizarre interpretation of wealth – that the more you owe, the richer you are). The law means that even if a landlords’ business runs at a loss (possible once interest rates rise), the landlord will be deemed to have made a huge profit, to be taxed on. This is a ticking time bomb.
I urge you to draw attention to this travesty of justice and common sense through your newspaper, so that it can be scrapped before it is enshrined in law. I will provide various links below which outline some of the issues and ramifications of the policy, which will enable your chosen journalist(s) to fully understand the decision.
One of our landlords (from the website for landlords and tenants: Property118) has also come up with some possible headlines you may want to consider for articles:
Potential headlines:
Immigrants will flood the streets because of Osborne’s “Clause 24.″

HMRC plan to smash Private Rental Sector into oblivion under “Clause 24.″

Councils warned about future B&B cost explosion caused by “Clause 24″

Osborne promised to smash up BTL industry under “clause 24″ for his “rich friends” before the election.

Mugabe would be proud of “Clause 24,″ say landlords.

Infinite Tax Rates now the “Norm” under “Clause 24.”

Tory party spin doctors try to defend “Clause 24″

Thousands of Evictions looming under Tory Government’s “Clause 24″

Links to sites/articles which explain the issue.

Dr Rosalind Beck

3 years ago

Hi Mark.
is it worth sending this letter to the Treasury as well and/or Megan Shaw? As I mentioned on the other thread, I think they are weakening - the fact that they said:.

‘This restriction will reduce the advantage landlords may have in the property market.’

I think it is really important that it has become a tentative statement, by using the word ‘may.’

As I said on the other thread: 'So now the Government massively interferes in a whole business sector which provides an essential service because they think the business sector MAY have an advantage over others wanting to buy property.' (when in fact, we have the powerful arguments that this is completely false)

Perhaps the message is getting through regarding how the unequal tax system in fact disadvantages landlords. I mean, how long can they continue saying white is black?

Maybe the Treasury's attention can be drawn to the dissonance/discrepancy between this response to the petition and the Chancellor's earlier justification for the tax grab?

Just to repeat what GO said: ‘‘The ability to deduct these costs puts investing in a rental property at an advantage.’

What do you think? I don't mind writing as long as we can agree on whom I should write to, but it would be better coming from you as you met them.

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