LANDLORDS, let me make this very clear, we need as many signatures on the www.saynotogeorge.co.uk petition as we can or your livelihood and investments will be under serious threat and you could go bust.
I am not exaggerating and I suggest you speak with your tenants as well, because the outcome of this tax grab is they will end up paying more for rental properties because there will be less supply and the cost of operating the properties will rise to pay the new tax. They will get it as hard as landlords, if not harder.
The new tax law which is due to be made law in September/October is set to tax landlords on their mortgage borrowings. That means there is no longer any way the mortgage interest costs can be offset as a cost. Instead, they will be part of the profit, pushing thousands of landlords into the higher earnings bracket and forcing them to pay even more tax.
The law itself once voted through, which it likely will because landlords are seen as a soft target and a political win can be made here, then it will start to come into force from 2017 onwards and be fully in place by 2021.
I know landlords that will go from making a profit on small or large portfolios to making large losses. They simply will not be able to afford to keep renting out properties. But they are caught in a catch 22, they are so highly leveraged that they cannot sell either while some areas of the country remain depressed and they face high mortgage repayment redemption fees and large capital gains tax bills.
They are facing financial ruin and for some the only alternative is to leave the country and escape the tax regime altogether – a terrible prospect for many nationals who do not want to leave family and friends behind, never mind their children leaving school.
I myself have taken the option that all I can do is raise my rents. There is no other choice and I do not look forward to passing this burden on to my tenants, but I must otherwise my financial future and retirement will fail. I am not rich; I am simply trying to create a retirement fund.
So we need 100,000 signatures on the petition and when I last looked it was less than 14,000. That is not encouraging. To an extent we are masters of our own destiny here and if this legislation goes through then we know what to expect. So let’s get it up as high as possible so it at least gets considered before it is made law. Get signing today.