A group of landlords represented by Cherie Blair have failed in their attempt to fight the incoming buy-to-let changes.
Blair - professionally known as Cherie Booth - owns over 35 properties along with her husband Tony Blair, and has claimed the government is ‘singling out’ buy-to-let landlords for unfair tax treatment while allowing others to keep their tax perks.
- Buy-to-let changes: what you need to know
- How to make money from buy-to-let
- Best areas for buy-to-let
- Learn more about landlord insurance
Landlords and tenants join forces
With the bulk of the new rules set to be introduced in 2017, landlords were arguing that the changes amounted to an unfair tax on tenants.
The impending changes will stop some costs being claimable as a business expense, reducing the amount of mortgage interest that landlords can offset against tax.
These increased costs will inevitably impact the price of tenants’ rent, something that could drive already inflated rental prices - rent in London, for example, can cost the equivalent of a £23,000 salary - even higher.
The Axe the Tenant Tax Group - claiming to represent over 150,000 landlords - argued similar things in court.
They said that many landlords could be left with a loss on their rental property, having to pay tax on their turnover rather than profit, adding that the tax was discriminating against private landlords and pushing up rents significantly.
“It’s not over yet”: Cherie Blair prepares for appeal
Campaigners now have seven days from the decision date to lodge an appeal.
And Blair vowed to carry on campaigning: “We will continue to engage with the government to make sure that the message comes over about the inherent unfairness of this tax.”
How likely they are to succeed in their mission to fight buy-to-let tax, however, is debatable given Mr Justice Dingemans’ comments: “It would be a miserable spectacle to watch a case that is bound to fail.” He said.
Buy-to-let through limited companies
Research has suggested that one way landlords will look to avoid the tax changes is to set up as a limited company.
With buy-to-let mortgages through limited companies set to surge it would appear clever investors are already finding ways around the move.
Do you think the laws are unfair? Have your say in the comments below.