A new website - www.saynotogeorge.co.uk - has been set up as a nucleus for opposition to Chancellor George Osborne’s proposals to restrict mortgage tax relief for landlords who let out properties.
The proposals, outlined in the Budget last month, limit tax relief to the basic rate of income tax - currently 20 per cent - even if the individual property owner pays a higher rate of tax. In addition, the Budget also introduced restrictions on what was previously the annual claiming of Wear and Tear allowance.
The new website explains how the tax proposal may hit different people in different ways - from estate and letting agents to landlords and tenants - and this is its section for letting agents:
Initially Letting Agents may see the change in tax as a good thing because it will force rents up. In most cases they earn a fixed percentage of the rents collected, so they’ll see an increase in their profit.
Unfortunately they might also have to deal with a higher amount of tenant complaints about maintenance. As Landlords are going to be hit badly by this tax increase they will have less money to spend on looking after their properties.
With rents increasing, it is likely, that rent arrears will rise too.
However the longer term consequences are likely to put many agents out of business. In the first instance Landlords will perhaps question whether they can afford to continue paying the agent’s fees (+ VAT) and may consider taking their properties under their own management.
Many Landlords will be forced to sell their properties or they may be repossessed, leaving the agent with much reduced income. There is likely to be a serious decline in the number of letting agents due to this tax change.
The new website also links to a petition which we have reported on in recent weeks.
There are now well over 11,000 signatories to the petition - you can see it here - and if it goes on to receive 100,000 signatures by late January the government will be obliged to consider giving the issue additional parliamentary time.
In addition to this opposition, a campaign group called the Landlord Tax Levy Campaign Group has been set up urging opponents of the tax measure to lobby MPs and write to Chancellor George Osborne.