You may have heard about the Chancellor’s Summer Budget Proposal where he aims to restrict mortgage interest relief for Private Landlords. It’s a bit of a mouthful we know, but what is important are the consequences of this change and how it affects you, your family, the people you deal with and the economy of the country as a whole.
The Chancellor says that what a Landlord is paying for the interest part of a monthly mortgage should not be allowed as a business cost. He calls it a tax break but in most cases it is a Landlord’s biggest expense on a property and is most definitely a business cost.
It’s a bit like the Chancellor deciding that a baker can’t offset the cost of his flour against his income. His flour is most definitely a business cost and is rightly allowed as so.
He says that mortgage interest rate relief was abolished for homeowners years ago so wants to ‘level the playing field’. However he is forgetting that homeowners are not subject to Capital Gains Tax when they sell a property (but Landlords are) and private rented property provides homes for nearly 4 million people.
It’s not just us this saying this. Many experts, including the Institute of Fiscal Studies say the Chancellor’s ‘line of argument is plain wrong’.
If you want to have your say and vote against Mr Osborne’s proposed changes please sign the petition.