Friday 16 September 2016

Landlords & Tenants Have Been Set Up To Lose On Clause 24


 
Update:  We've moved our blog to www.folkestone-estateagent.co.uk


For those who haven't heard, Clause 24 first came to light in the Summer Budget of 2015 and has been subject to a great deal of controversy since.


In simple terms, the Government is proposing to start applying tax to a portion of the rent paid to a landlord which s/he then pays into the mortgage as interest.  This flies in the face of standard business practice of taxing businesses on actual profit.


If you don't run your own business, the best analogy I can come up with is if HMRC started taxing ordinary folk on expenses we claim from our employers in lieu of having a company credit card.  Imagine the kerfuffle!


So why is this important to both landlords and tenants?  Because increased costs for landlords will inevitably lead to some landlords either selling their properties or putting the rent up*.


Higher Costs for Landlords + Less Properties on the Market = Rent Increases For Tenants.


The truly ironic part of this whole debacle is that the purpose of these tax changes was to make it easier for first time buyers to get on the property ladder. I think it's safe to presume that most of these first time buyers will be in rented accommodation.


Want to Know More?
Visit the saynotogeorge.co.uk/ website, follow this Facebook Page set up by Platinum Property Partners who have crowd funded a legal case to challenge, and if you don't like what you're reading...




*survey conducted by spareroom.co.uk found that nearly half of landlords intend to raise rents in 2016.