Our Managing Director, Dorian Gonsalves has announced Belvoir's support of a judicial review as part of a national campaign set up to fight the unfair taxation of private landlords.
Our Managing Director, Dorian Gonsalves has announced Belvoir’s support of a judicial review as part of a national campaign set up to fight the unfair taxation of private landlords.
“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 quickly crowdfunded the initial £15,000 that is required to employ a legal team who can begin looking in to the logistics of the campaign. Up until this date, the campaign has raised another £50,000 – these funds will go towards a court hearing in which the lawfulness of the Conservative Government’s decision will be investigated.
In our recent survey of UK landlords, we asked what they perceived to be the single largest challenge landlords face in 2016 – a large quantity of the responses quoted Clause 24 as one of the trickiest and most potentially damaging challenges that they would be facing over the next 12 months.
Dorian confirms ‘Belvoir has pledged money to help fund this fight against what amounts to an unlawful breach of human rights and/or European law.’ Landlords will also hear from Belvoir franchise owners who will invite them to support this important legal challenge.
Clause 24 will disallow individuals who operate buy to let properties in their own name to offset their legitimate financial costs, including mortgage interest. However, the likes of corporations, wealthy cash buyers and overseas landlords will not be affected, creating a completely unfair advantage in the market. ‘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’ says Dorian.
The results of Clause 24 getting the go ahead could be damaging and devastating for the UK property market. Rents would likely have to increase, and many private landlords may have no option but to sell their properties – if there is a mass exodus in the market by landlords, many tenants who cannot afford to buy property will likely lose their homes, the government haven’t taken this in to account when making their decision.
“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” Dorian confirms.
Further information on Clause 24 and the campaign can be found here – we urge landlords and agents to get involved with this campaign and help restore a fair and level playing field within the market.