Belvoir Managing Director, Dorian Gonsalves, has announced the company’s support for a national campaign to fight unfair taxes for private landlords – the Tax Judicial Review .
“The campaign for a judicial review of Clause 24 of the Finance Act 2015 was launched by two hard working Buy to Let landlords who are trying to prevent what is believed to be discrimination by the Government against individuals who borrow money in their own names in order to fund their portfolios,” says Dorian.
“The campaign is something that Belvoir fully supports. Crowd funding via CrowdJustice quickly raised the initial £15,000 needed to employ an experienced legal team to look at the logistics of challenging this unfair tax.
“Over £50,000 has now been pledged by landlords, agents and other affected sectors of the market. This money will be used to fund phase two; a court proceeding where a judge reviews the lawfulness of a decision or action taken by a public body – in this case the Conservative Government. Belvoir has pledged money to help fund this fight against what amounts to an unlawful breach of human rights and/or European law.
“Belvoir’s franchise owners will also be writing to landlords and inviting them to pledge their support for this important legal challenge. We will explain that Clause 24 will disallow the perfectly legitimate finance costs (including mortgage interest), of individuals who operate BTL properties in their own name. Institutions, corporations, wealthy cash buyers and overseas landlords will, however, be excluded, thus giving this sector of the market an unfair advantage.
“Every single business in the UK is allowed to offset their total costs against their income before tax. The Summer Budget changed this fundamental and important business principle for landlords. Furthermore it was done without consultation and the changes within Clause 24 are so intentionally complex that many landlords fail to understand its negative implications on their financial circumstances.
Thousands of people will find themselves being taxed on loss-making BTL properties, see massive increases in the percentage of tax payable and could find themselves pushed upwards into a higher tax bracket, even though they may well not be making a single penny of profit.
“If Clause 24 goes ahead the impact on the UK housing market could potentially be devastating. Rents will increase, many private landlords are likely to consider selling their properties, and there will be a reluctance to invest in the future.
This will result in even more pressure on the PRS and if demand for properties falls builders will simply stop building, which is exactly what happened in 2008/2009. Unfortunately the Government has made no plans for rehousing those tenants who are likely to lose their homes as a result of a mass exodus from the market by landlords.
“Belvoir fully supports any actions that will help to prevent unethical, unprofessional and illegal practices by rogue landlords. However, Clause 24 is not a fair or intelligent means of achieving this. Clause 24 will not, as the Government states, only affect “the wealthiest landlords”. In fact, it will not affect the wealthiest landlords at all, because they are the ones most able to invest in BTL properties without the need for mortgage finance and are therefore totally unaffected.
“Further information can be found on Judicial Review of Clause 24 by visiting www.crowdjustice.co.uk/case/clause24. I urge landlords and other agencies to get involved in a bid to restore the market back to an even playing field, where private landlords are not unfairly discriminated against.”
Belvoir now has 211 offices nationwide. To find your nearest Belvoir office, visit their website at – www.belvoir.co.uk