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Valuation Request

Government over its planned changes on tax

The Residential Landlords Association is taking legal advice on whether to challenge the Government over its planned changes on tax.

George Osborne announced changes to mortgage interest relief in the 2015 Summer Budget.
The changes, which will mean that landlords will be taxed on turnover and not profit, target smaller mortgaged landlords only.

The RLA is seeking advice as to whether the new regime will be a breach of the Human Rights Act and European Union Law on free movement of capital.

Its action is separate from that of two landlords, Chris Cooper and Steve Bolton, who crowd-funded to raise money to fund a judicial review.

The RLA is known to have a war chest of its own to fight such battles, should the need arise.

The organisation has also hit out at the Government, saying that its policies are encouraging foreign property investors.

The 3% Stamp Duty Land Tax surcharge announced in the Autumn Statement will, like the tax change on mortgage interest, also be levied against small landlords. While  smaller buy-to-let purchasers will have to pay the surcharge, those buying 15 or more properties in a single deal will be exempt.

The RLA said that this would favour larger investors, “many of whom are likely to be from overseas”.
RLA chairman Alan Ward said: “It is astonishing that a Conservative Chancellor is leaving the way open for foreign investors and cutting opportunities for individual UK landlords.

“This additional assault on private landlords coming on top of changes to the taxation of rental income will only lead to reduced supply and higher rents
“The Chancellor’s planned changes to Stamp Duty came as a bolt out of the blue.

“Regardless of the Government’s plans for home ownership, demand for rented housing is only set to increase.

“The Government needs to understand that not everyone will be able to afford to buy a house or indeed want to, even if more houses are built.

“Its whole policy towards the private rented sector needs to change.
“If it does not, it will only make the housing crisis worse.”

* Separately, the chair of the Treasury Select Committee yesterday asked the Chancellor if the Stamp Duty surcharge would help or inhibit mobility in the jobs world.

Osborne replied: “I think that it will help to promote home ownership, because it will mean that there is a more level playing field between an owner-occupier who wants to buy a house, a first-time buying family and a buy-to-let landlord.

“There is nothing wrong with people investing in property, but there should be a level playing field so that we reverse the decline in home ownership in our country.”

House prices bounced

House prices bounced up 1.7% in December to stand at £208,286, the Halifax has reported.
The figure compares with £204,830 in November, and is 9.5% higher than the £189,428 recorded in December 2014.
The annual increase is the largest since 2006, the year before the last housing market downturn started to savage the industry.
On a quarterly basis, average house prices rose by £36.50 a day from October to December.
Halifax housing economist Martin Ellis said there was a “substantial gap between demand and supply”, which is unlikely to change in the short term, “resulting in continuing upward pressure on prices”.
Capital Economics property economist Hansen Lu said house prices are out of kilter with wages, while still predicting house price inflation this year, albeit at a much slower rate.
He said: “We think the market needs to take a breather soon. Consequently, we see house price inflation dropping to 2% by the end of 2016.”