Submitted by Ruhal Uddin on Friday 24th July 2015
Published on Monday 27th July 2015
Current status: Closed
Closed: Wednesday 27th January 2016
Signatures: 60,894
Tagged with
Reverse the planned tax relief restriction on ‘individual’ landlords
We operate as sole traders and incur costs in the course of running our business. The planned restriction will unfairly target us by preventing us from offsetting costs in the same manner as other sole traders. We ask that the planned restriction be reconsidered as it has unfair implications.
The Institute for Fiscal Studies has stated, in response to the Budget, individual landlords are already taxed more heavily than other homeowners.
The private rented sector is heavily reliant on individual landlords. The planned change is likely to result in higher rents due to landlords looking to offset higher tax liabilities.
In some cases, employed individuals own buy to let properties as investments for retirement. The planned restriction would adversely and unfairly affect them.
You can't sign this petition because it is now closed. But you can still comment on it here at Repetition.me!
The Government responded to this petition on Thursday 27th August 2015
The Government is committed to a fair tax system so is restricting relief on landlord property finance costs to the basic rate of tax, reducing the generosity for wealthier landlords.
The Government is committed to a fair tax system so is restricting tax relief landlords can claim on property finance costs to the basic rate of income tax.
Landlords are currently able to offset their mortgage interest and other finance costs against their property income, reducing their tax liability. This relief is not available for ordinary homebuyers and not available to those investing in other assets such as shares. Currently the landlords with the largest incomes benefit the most, receiving relief at their marginal tax rates of 40% or 45%.
By restricting finance cost relief available to the basic rate of income tax (20%) all finance costs incurred by individual landlords will be treated the same by the tax system. This recognises the benefits to the economy that investment in property can bring but ensures the landlords with the largest incomes will no longer benefit from higher rates of tax relief.
By unifying the treatment of finance costs for all individual landlords, the Government is reducing the distortion between property investment and investment in other assets, and reducing the advantage landlords may have in the property market over ordinary homebuyers.
Less than 1 in 5 (18%) of individual landlords are expected to pay more tax as a result of this measure. Taking account of the other measures from the Summer Budget, the Office of Budget Responsibility (OBR) have not adjusted their forecast for house prices. The OBR expect the impact on the housing market will be small. Furthermore, this change is being introduced gradually from April 2017 over 4 years. This will give landlords time to plan for and adjust to these changes.
HM Treasury
3.12.34.96 Wed, 25 Dec 2024 07:39:00 +0000
