Landlords to increase rents after losing the judicial review

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A recent judicial review challenge to the government’s changes to the tax relief on commercial mortgages has been rejected in the high court, reported in October 2016.

The same website also says, in a separate October 2016 article, that the response to this decision by landlords has been to warn that they will substantially increase rents to cover the effect the new tax changes will have on reducing their profits.

The forecast that rents will increase was made by the pressure group Axe the Tenant Tax, which is disappointed by Mr Justice Dingemans’ decision that the government was entitled to change the tax rules. Dingemans said that the tax changes were made through a political decision and, though some may not agree with it, the government was legally entitled to make it.

The Axe the Tenant Campaign is continuing to oppose the tax changes and has urged landlords to contact their local MPs to raise their concerns. Those behind it claim that the new tax laws will give preferential treatment to corporate landlords compared to private landlords.

HM Revenue and Customs responded by saying that there is “no equivalence” between the tax handling of corporate and individual landlords and holiday home owners.

Buy-to-let landlords have been affected by a number of cost increases, including a rise in stamp duty and tax relief reductions. However, with commercial mortgages at low interest rates and a high demand for rented accommodation, there are still many landlords investing in the buy-to-let sector, especially in the North of England, where rents are rising.

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