Two landlords incensed by Osborne’s buy-to-let tinkering are attempting to take the Chancellor to court.
Unfair, undemocratic, underhanded… and unlawful?
It was a tumultuous 2015 for the buy-to-let community, with landlords caught in the government’s crosshairs in both the Summer Budget and Autumn Statement. Tens of thousands took to signing a petition to the get changes debated in parliament, but with just two weeks left it’s still 50,000 short of the 100,000 signatures needed.
Against this backdrop it could look a little bleak for buy-to-let, but there could still be hope in the shape of two ambitious and innovative landlords. Steve Bolton - chairman of Platinum Property Partners - and his fellow landlord Chris Cooper, are attempting to take Osborne to court to get the changes overturned.
Speaking on the plan Bolton stated “It’s not clear why the government has chosen to just launch an attack on buy-to-let owner-operators with mortgages. It’s a tax from Alice in Wonderland – truly absurd and divorced from real life. Not only is this tax grab unfair, undemocratic and underhanded, but we believe that it could also be unlawful.”
£50,000 fighting fund
The pair hatched their plan towards the end of December, with Steve calling for financial backers over Twitter:
They quickly reached their £50,000 target through some 741 supporters, and they’ve since submitted the case to Omnia Strategy - a legal firm founded and chaired by Cherie Blair. The arguments central to their legal challenge are that:
- Owner-occupiers pay zero Capital Gains Tax when they sell their property, whereas owners of rental accommodation pay between 18 and 28 per cent CGT;
- Owner-occupiers have no regulations or costs associated with fire, gas and electrical safety and certification, licensing and energy performance certificates, whereas owners of rental accommodation have financial and/or legal obligations relating to more than 200 different regulations and laws. Failure to comply can result in imprisonment and substantial financial penalties;
- Many owner-occupiers can buy property with a deposit of just five to 10 per cent and access lower interest rates, compared to 20 to 25 per cent deposits and higher interest rates for buy to let borrowers;
- Owner occupiers can benefit from the ‘rent a room’ tax-free scheme, which is rising from £4,250 a year to £7,500 from April, compared to paying tax on rental profits of between 20 to 45 per cent.
They’re now waiting for expert legal opinion, with this expected in the coming week. You can keep track of their progress through their dedicated Facebook page here. This could be one to watch closely in the coming days and weeks …
What do you make of the legal challenge? Do you agree with its arguments? Let us know in the comments section below.