RLA call for Section 24 rethink after Stamp Duty windfall

by Mark Alexander

15:40 PM, 1st February 2017
About 2 years ago

RLA call for Section 24 rethink after Stamp Duty windfall

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RLA call for Section 24 rethink after Stamp Duty windfall

A few weeks ago I wasn’t at all happy with the RLA (“Residential Landlords Association”) and I published a rather damning article entitled Are the RLA losing the plot?”

Well, by my reckoning, they have now redeemed themselves with a Call for tax rethink after stamp duty windfall

Are the RLA losing the plotIn an article yesterday on the back of the figures published showing a £1.19 billion Stamp Duty surcharge windfall for the Treasury up to the end of last year the RLA have called for a Landlord Tax rethink.

“The RLA is now calling on the Government to use this extra revenue from the stamp duty changes to scrap planned reforms to mortgage interest relief, which will, in turn, prevent landlords selling up or having to increase rents.”

One RLA survey has found that 58% of landlords are considering reducing investment in their rental properties because of the changes. And 66% feel the tax changes will place upwards pressure on market rents.

At the very least, the RLA believes the Government should pause the start of the introduction, from April, of the mortgage interest changes to enable a better assessment to be undertaken of the likely impact of the policy.

RLA Policy Director, David Smith, said: “In raising nearly twice as much in just nine months as the tax was predicted to make in one year this stamp duty windfall gives the Government a chance to back the rental market and support the development of new homes which we desperately need.

“At no stage has evidence been published to support the assertion that landlords are taxed more favourably than homeowners, or that they are squeezing first time buyers out of the market.

“Assessments by the Institute for Fiscal Studies and the London Schools of Economics contradict the Treasury’s position completely.

“It is also nonsense for HMRC to suggest that one in five landlords will be affected by the mortgage interest changes, when what matters is the number of properties affected.

“The Government has received far more money than it  expected. We urge them to use this to support the country’s tenants and undertake a fuller impact assessment of a policy that has the potential to cause untold damage to the rental market.”



Comments

NW Landlord

16:00 PM, 1st February 2017
About 2 years ago

Great angle let's hope some sense prevails

Dr Rosalind Beck

17:13 PM, 1st February 2017
About 2 years ago

Yes, Mark. I am of the same opinion. I was very annoyed with the RLA the other week with their suggestion about how the spoils of s24 should be spent. I am very pleased though with this angle which I think is clever and sensible. I think this is an angle we should all now push. With Hammond saying to Steve Bolton that he wanted alternative suggestions regarding how to raise the money that theoretically would be raised by s24, it can be pointed out by all of us that the 3% stamp duty levy has already achieved this so no further action is required. Abandon s24. Simples.

Gromit

17:38 PM, 1st February 2017
About 2 years ago

Sadly, given the Government's dire financial position, I reckon they'll just pocket it to help balance the books.

Mark Alexander

18:17 PM, 1st February 2017
About 2 years ago

I hope the Axe The Tenant Tax coalition back this RLA suggestion. If they do it will be the first time the others have openly supported a rivals policies. If they don't, that's the end of the coalition, if it ever got started other than in name that is!
.

Dr Rosalind Beck

18:20 PM, 1st February 2017
About 2 years ago

Reply to the comment left by "Mark Alexander" at "01/02/2017 - 18:17":

It seems like the natural thing to do. Steve was asked to come up with a way of finding the equivalent tax stream and he can say 'voila! It's already arrived!'

Steven Burman

10:45 AM, 2nd February 2017
About 2 years ago

Reply to the comment left by "Barry Fitzpatrick" at "01/02/2017 - 17:38":

Barry, you are absolutely correct. Section 24 has always been about Osborne (and now Hammond) lining the pockets of their corporate chums. They couldn't give a stuff about small landlords or tenants!

CazT

13:54 PM, 2nd February 2017
About 2 years ago

I'll believe this when I see it happen! Too late for me, I've sold half of my properties so that I can keep the remaining. I am so totally disillusioned with this government that I have decided to become an ostrich and stick my head firmly into the sand until it either blows over or forces me out completely. I'm only a very small cog in the rental wheel and like many others of my generation, my few properties were to help with my pension (something the government has told us we should be actively doing) and now they are penalising us for trying to do exactly that! I'm glad I'm not just starting out in this business - it's far too complicated and downright expensive nowadays. Rant over, sorry all ?

NW Landlord

14:21 PM, 2nd February 2017
About 2 years ago

What this government have done is nothing short of a national disgrace to ordinary hard working people I wouldn't listen to a word they say sorry to hear ur plight the million dollar question is WHERE ARE ALL THESE PEOPLE GOING TO LIVE once the sell off starts

Chris Novice Shark Bait

12:04 PM, 4th February 2017
About 2 years ago

I am reminded of scenes from Brave Heart. Scotch kilted bare bottoms and arrows. Cries of Hold! Hold! etc then enormous wooden pikes lifted at just the right moment to impale the advancing cavalry. Timing may be ever so important for the underdogs. Its high risk and requires bravery which is a hairs breadth away from foolishness. Divided we fall.

Seething Landlord

12:43 PM, 4th February 2017
About 2 years ago

Reply to the comment left by "CazT " at "02/02/2017 - 13:54":

Hi Caz, do you know what happened to the properties you sold? Were they bought by landlords and still rented or by owner occupiers? If by landlords, were they cash buyers; corporates or individuals? Where did the tenants go?
If you have any of this information it could help to inform the debate about the consequences of S24 for the PRS.
We have had quite a few enquiries from tenants whose landlords are selling but I haven't seen or heard any information about who is buying.

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