An infuriated landlord has put up a large billboard in a prominent street location to protest about Section 24.
This is the tax change phasing out landlords’ ability to set mortgage interest costs against tax, while landlords will be taxed on turnover and not profit.
David Heard, who has a portfolio of some 40 properties, has so far evicted six families and sold four of his properties plus a building plot where he had planned to develop a rental property – saying that this is purely down to Section 24. Other properties are awaiting sale.
He has also increased his rents, by 6% last year and a further 5% this year.
He said: “I have informed my tenants, with information packs that explain the policy, that these rent rises will be ongoing unless the policy is reversed. If I go bankrupt, we all lose.”
Heard told EYE that he had always intended holding on to his portfolio for life, and that he had previously been confident in assuring his tenants of a secure home.
However, he said that once Section 24 is fully implemented, he will be paying tax on around £80,000 of costs that he has paid out.
He said: “I have had to put measures in place in an endeavour to secure my financial future.”
Heard said that he has tried to get his MP, Penny Mordaunt, interested but said she had ignored his request for a meeting.
His solution has been to put up a billboard where she – and others – can see it.
It is in Stamshaw Road, Portsmouth – a main road location close to the ferry port and motorway.
It has so far cost him around £300, and he is paying a further £140 a month for a Facebook campaign. He plans to keep the billboard in place for up to a year.
Heard is certain that he is not the only landlord having to dispose of properties because of Section 24.
However, he warns that if there is a rush to sell buy-to-let properties, prices could drop: “If that happens some landlords will be stuck in a position without sufficient equity to sell, and making a loss on the rental income.”
Section 24 (so called because if it Section 24 of
George Osborne’s Finance Act 2015) started to be phased in last year and will be fully in place by 2020 when 100% of finance interest costs will be restricted to the basic 20% tax relief.
It has been called the biggest threat landlords have ever faced, with estimates that it could push about half into a higher rate of tax because of the way the calculation has been changed. Section 24 is often referred to by landlords as a ‘tenant tax’ because they argue it is tenants who ultimately pay the price.
Yesterday, there was talk of crowd-funding to help landlords put up similar billboards elsewhere.
Good on him.
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The government don’t care, it’s clearly their plan to reduce the housing stock held by private landlords. Coupled with banning tenant fees, which is going to increase rents as agents up their fees to reduce the loss of income, landlords will be selling up. Great for buyers but where are the people who have no option but to rent going to go?
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I suspect that the Govt want the ‘build to rent’ sector to provide. Many institutions are keen on it however, there is one huge problem; their models can’t pay the appropriate value for the land which they will soon realise is a very limiting factor. In the meantime, tenants are put at risk of losing their home as even the most responsible landlord is placed in a position where their and their families financial security is undermined.
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Well done David for walking your talk unlike the rest of us moaning about it.
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I would urge people to contribute – even if you are not a landlord, basic justice dictates that no-one should have to pay tax on a profit they have not made. I will try and paste the link here: https://www.justgiving.com/crowdfunding/section-24-billboard
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Top, top guy. These billboards can be had for just £500 so I would urge everyone to contribute to the fundraising and even offer to sponsor one with your lettings name on it! Brilliant work David, more like you please!
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So the Osborne/Cameron legacy is that they have introduced measures whereby 100,000s of people/families have/will lose their rental homes.
Rents shall rise to unaffordable levels as they shall far outstrip inflation for many and huge amounts of people/families from broken relationships who are living in rented accommodation, who previously had their own homes are unlikely to ever buy again as a consequence of massive Stamp Duty Land Tax hikes over the last 10 years or so.
It was not that long ago that stamp duty was 1% across the board, apparently, it is now 3% on average.
Do these two still have police protection?
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Yes, well done David, We need to think of other innovative advertising methods – each different measure will have a slightly different impact.
For example, look at this initiative and the publicity. Lets think of others, side of a London bus for a month ?
We have to get Tenant support groups into being embarrassed that they are not taking this message forward on behalf of Tenants who they are supposed to represent !
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I pay tax on my investments, I pay tax on my purchase of investments why should he not pay tax on his
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He does! It’s not about not paying tax, it’s about not paying 90 or 100% tax – as you don’t on your investments.
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The Treasury cocked up in bailing out the big banks.
The banks have targeted property owners and in cases are asset stripping as theyve earnt little on low interest rates.
Property moreso than ever is the way Treasury and banks see as the golden goose that keeps on laying. But it wont.
When professional landlords place their thoughts in public like this. A few thousand more for each one is thinking the same.
Pressure from gov and banks and poor service budget low fee agents who dont equate to best service = best offers, means were in further threat of market collapse.
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This is not about 1 landlord!. The Governments own figures says it’ll affect 400,000 landlords who collectively own ~1m properties providing homes for 2.3m people. It is these 2.3m .tenants who are going to suffer the most with huge rents rises, having to move home, or being evicted.
This is a deliberate, callous and calculated attack on Tenants by this Government. The Government knows how devastating it will be that’s why they delayed its introduction for 2 years and are phasing its implementation over a further 4 years.
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“providing homes for 2.3m people” – landlords aren’t providing homes, they are stealing them from ordinary people so they are forced to rent! I’m glad the unfair tax advantage will be limited so I can finally buy a place to live and not being overbid by another greedy *******.
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“I have informed my tenants, with information packs that explain the policy, that these rent rises will be ongoing unless the policy is reversed. If I go bankrupt, we all lose.” – LOL! Someone may actually buy a property as a permanent place to live, can you imagine that..??
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