The National Landlords Association says a U-turn on the forthcoming cut to buy-to-let tax relief “is not going to happen” despite landlords petitioning the Government.
Landlords say they have been unfairly targeted by the changes, which restrict the tax relief landlords can claim on property finance costs to the basic rate of income tax.
They have started a petition, which has reached nearly 25,000 signatures, in order to force the Government to consider reversing the changes. Over 100,000 signatures are needed before it can be considered for debate in Parliament.
However, the NLA, a body that represents landlords, says a U-turn will “categorically” not happen.
NLA head of policy Chris Norris says: “Landlords are understandably very worried by this and you only have to run the numbers to see that it could potentially drive people out of the business.
“But [petitions] are quite limited. We are certainly not suggesting people don’t sign the petition, and they can be quite good for raising awareness, but in this case we need to be a bit more targeted and more focused to get things changed.
“As much as we would love to see a U-turn, we are realistic and we have been told categorically that it is not going to happen.”
But Norris says the NLA is lobbying the Government to introduce business asset roll-over relief so that landlords do not end up paying capital gains tax twice if they decide to restructure their portfolios when the change comes in.
He adds: “Almost any other business can sell underperforming assets and reinvest and defer that CGT until they sell the whole business.
“If a landlord has made a gain on their property – which is quite likely – they will pay CGT on the sale and take whatever they have left, but when they come to sell up they will pay again.”
Another trade body, the Residential Landlords Association, has written to the Chancellor asking him to “pause” the proposals while the impact of the change is investigated.
The RLA argues the change “destroys the established business model which has allowed the sector to grow and play a significant role in housing provision” since the Housing Act in 1988.
It says the change will increase rents, dissuade landlords from investing in purchasing properties and lead to lower standards because of reduced investment in repairs.
The letter adds: “We fear this proposal will send out the message of a longer-term intention to end all tax relief on mortgage interest for private landlords”.