Click here to view the original article ‘Treasury defends tax changes for landlords as petition sails past 14,000 signatures’

 

A petition calling on the reintroduction of full mortgage interest relief for landlords and the abolition of the 3% Stamp Duty surcharge has attracted over 14,000 signatures.

The petition has also received a government response.

This defends the changes it has introduced, saying: “The Government introduced changes to finance cost relief as part of a package of measures at Summer Budget 2015 to help reduce the deficit and rebalance the economy.

“By restricting landlords’ finance cost relief to the basic rate of income tax we are helping to reduce the advantage landlords may have over home owners in the property market.

“Income tax relief for finance costs is not available to ordinary home buyers.”

The Treasury response continues: “Previously, landlords could get relief on their finance costs at their marginal rate of income tax.

“By restricting finance cost relief to the basic rate, all individual landlords will receive the same rate of income tax relief on their finance costs.

“Landlords can still claim income tax relief at their marginal rate of tax on day-to-day running costs incurred in letting out a property, such as letting agent fees and replacing furniture.

“Finance costs are different to other expenses, as having a mortgage allows the landlord to purchase a more expensive property and incur larger gains on the investment than they would have done without it.

“Using actual self-assessment data, HMRC estimate that only one in five landlords will pay more tax on their property income because of this measure.”

On the introduction of the Stamp Duty surcharge, the official response says: “While it is right that people should be free to purchase a second home or invest in a buy-to-let property, the Government is aware that this can impact on other people’s ability to get on to the property ladder.

“The higher rates are part of the Government’s commitment to support first-time buyers.”

The petition, placed by landlord Mark Homer, has until November 14 to run. If it attracts 100,000 signatures, it will have to be considered for debate in Parliament.

Petition: Reintroduce full mortgage interest relief and drop the 3% stamp duty surcharge

 

Property Industry Eye