A Level Playing Field Between Homeowners and Landlords

A Level Playing Field Between Homeowners and Landlords

10:19 AM, 29th August 2015, About 6 years ago 94

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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

by Some One

23:06 PM, 8th September 2015, About 6 years ago

So the Petitions Committee met today:
http://www.parliament.uk/business/committees/committees-a-z/commons-select/petitions-committee/news-parliament-2015/8-sept-committee-decisions/

" Reverse the planned tax relief restriction on ‘individual’ landlords

The Committee noted that the issue of the petition was in the Finance Bill which was currently being debated in the House of Commons.

The Committee agreed that it would write to petitioners to explain how they could send their views to the Public Bill Committee if they wished to, and how they could follow debates on the Finance Bill in the House of Commons. "

Now, hopefully it can stop being a distraction and people can concentrate on real lobbying.

by Trendo

4:01 AM, 9th September 2015, About 6 years ago

If the arguemant that btl IS "STEALING " ftb is to be given any credence at all then 4 habitual rooms or 1 /2 bed properties and is in Council Tax “E” banding or lower., is a far more sensible and practicable way forward Graham, right now we might as well work on the colour of LL socks to implented Georges budget Disaster plan.

What is even more sensible is too allow onerous regulation and natural market forces & interest rates to play out without meddling.

George Osborn is like a pyromaniac in a firework factory,

by Graham Landlord

15:23 PM, 9th September 2015, About 6 years ago

Reply to the comment left by "Trendo " at "09/09/2015 - 04:01":

My point is, Landlords are a target. One is dreaming if you think the government is going to stop in its tracks. We might change their direction. If they leave us alone and only hit the future purchase of small low cost houses, we are free to decide how we will step forward into the future. You might not buy any small houses and only buy blocks of flats, HMO’s or lock garages, but what you have will remained unfettered. You wont be losing sleep over it!

by S.E. Landlord

16:15 PM, 9th September 2015, About 6 years ago

Reply to the comment left by "Some One" at "08/09/2015 - 12:01":

I would expect your landlord to follow market rents and therefore if the non-incorporated landlords increase their rents to cover extra costs the probability is the incorporated landlords will follow.

by Barry White

22:03 PM, 9th September 2015, About 6 years ago

Mark, I am afraid what you present here is not a valid argument against the chancellor's stated reasoning for restricting the tax relief to the basic rate. Here you state that:

" The key message seems to be that Government wishes to “level the field” for homeowners and landlords."

This is not what Osborne said in his speech; what was actually said was:

"...we will create a more level playing-field between those buying a home to let, and those who are buying a home to live in.

Buy-to-let landlords have a huge advantage in the market as they can offset their mortgage interest payments against their income, whereas homebuyers cannot."

The treasury can simply dismiss this argument as being irrelevant, stating it was never their intention to level the playing field between landlords and homeowners, but to level the playing field between those buying a home to live in and those buying to let. This is the point I was alluding to on the Summer Budget thread before I was jumped on, however I hadn't re-read what Osborne had actually said in his speech, thus my point may not have been clearly made.

As someone who works with barristers, I am sure you appreciate this difference between home owner and home buyer. Further, I am sure you will appreciate the importance of constructing arguments which go to the heart of the chancellor's stated aim; these will be the arguments that cannot be so easily dismissed.

Now, I'm half expecting to be banned, however, I will say that I don't think that anything I have written here, or elsewhere can be said to be wrong, and I actually think I have been quite helpful in providing pointers where I think arguments are weak or poorly constructed.

by Mark Alexander

22:55 PM, 9th September 2015, About 6 years ago

Reply to the comment left by "Barry White" at "09/09/2015 - 22:03":

I have no problem with people challenging my views, particularly for constructive purposes.
.

by Dr Rosalind Beck

23:58 PM, 9th September 2015, About 6 years ago

Reply to the comment left by "Barry White" at "09/09/2015 - 22:03":

So would you agree that the legislation shouldn't be retrospective? The only way the current retrospective proposal could feasibly have merit (although I dispute that on the grounds that it is outrageously and criminally unfair) would be if we had a time machine and the amorphous, unknown group of potential first time buyers could travel back in time and have the 'level playing field.'
And how does the level playing field work vis-a-vis people whose mums and dads can help them with a deposit and those who can't? After landlords have been driven into the ground and this has had very little effect on first time buyers getting on the property ladder (obviously, because the causes of this 'problem' are completely different and mostly unrelated to landlords) should we target the awful 'scum' whose parents help them with a deposit? (NB. for myself, I come from a ridiculously poor family and the financial help always went upwards and not downwards, so no-one can point the finger at me! I also don't spend my time ruing the fact that I had to do it myself. Perhaps that's why one of my paedophile ex-tenants called me a 'sanctimonious bitch' - an epithet I rather liked.)

by Graham Landlord

8:47 AM, 10th September 2015, About 6 years ago

Reply to the comment left by "Barry White" at "09/09/2015 - 22:03":

I 100% agree Barry. The only way forward is to ask for this restriction to be targeted only on First-Time Buyer Homes with a clause like

Mortgage Tax Relief is limited to the basic rate on all residential property that is purchased after “1st Jan 2016”, has four habitual rooms or less and is in Council Tax “C” banding or lower.

The Government’s target is to assist first-time buyers. They are not going to step back from that. We can only hope to do a damage limiting exercise by getting them to identify and focus on that future transaction

by S.E. Landlord

9:02 AM, 10th September 2015, About 6 years ago

Reply to the comment left by "Graham Chilvers" at "10/09/2015 - 08:47":

Most properties that can be converted into HMOs can also be converted in to one and two bed flats so the argument about removing properties from ftb can still be applied so I think unlikely to be successful.

If the campaign wants the support of all landlords then the arguments against the change needs to also benefit all landlords otherwise the number of landlords supporting the campaign will drop rapidly.

by Barry White

9:09 AM, 10th September 2015, About 6 years ago

Ros, I don't agree that the legislation is retrospective. If I am wrong about this, then It is no more retrospective than changing the dividend tax (directors could argue that it should not apply to dividends paid from retained earnings) or even changing income tax (employees could argue that it should only apply to new jobs, but only if tax goes up, of course!).

A true retrospective change generally has the effect that you would have to pay tax for previous years, and this would be regardless of whether you unwound your portfolio or not. Further, I am not sure that you would want to use the word "retrospective" as tax rules are normally only changed to catch tax avoidance, an association I am sure you would be keen to avoid.

With regards the "level playing field", Osborne's stated aim in the budget speech was to level the field between buy-to-let and, I guess what you can describe as, "buy-to-occupy" (BTO), and that is all. He is not looking to level the field between lucky [sic. "scum"] FTB BTOs who get help from their parents against FTBs who are less fortunate. As such, I don't think such arguments will really go anywhere as they do not address Osborne's stated aim (BTL v BTO).

Further, BTO is also a wider group than just first time buyers, so to address Osborne's aim, landlords will have to either widen their argument to include all BTO purchasers (not just FTBs), or narrow the argument to focus on just FTBs. The only way I can see that you can narrow the argument to just include FTBs is to show that landlords buy the type of properties that it could be reasonably assumed to be suitable FTB properties. This is fraught with danger as you then risk giving treasury a point scoring opportunity by again being accused of competing with FTBs.


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