Private landlords vow to fight on after losing 'tenant tax' challenge

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Private landlords say they will fight on after losing a High Court battle to block proposed changes to the law which threaten to cut their income from buy-to-let properties.

A coalition called "Axe the Tenant Tax" was refused permission by a senior judge to seek a judicial review.

Cherie Booth QC, wife of former premier Tony Blair, and fellow QC Conor Quigley, represented the coalition.

They argued the changes were "unlawful, unreasonable and discriminatory" because they did not also apply to corporate landlords.

But Mr Justice Dingemans, sitting in London, ruled the legal challenge was bound to fail.

The judge said the extent to which corporate bodies should be treated differently to individuals when it came to tax laws "raises political and economic questions, but not in this instance a legal one."

During a 90-minute hearing, there was loud applause in court for Ms Booth as she argued the changes proposed under Section 24 of the Finance (No 2) Act 2015, due to be introduced in 2017, would unfairly result in cuts in income for "hard-working members of the public" who had bought properties to rent in order to supplement their savings at a time when interest rates were low.

The changes mean most individual landlords with mortgages will have to pay tax on their turnover, rather than their profit.

Ms Booth argued the changes would distort competition and give an unfair advantage to corporate landlords.

The QC said she accepted that the law allowed the Government a wide margin of appreciation, but argued: "Nevertheless it doesn't give the Government a free hand to deprive British citizens of hard-won property rights in an unreasonable, discriminatory way."

But the judge rejected claims that the changes would be contrary to EU legislation and anti-discrimination laws.

Ms Booth said later the coalition, having lost in the courts, planned to fight on and "engage with the Government" more directly over the issue.

Ms Booth and Mr Blair and their three children between them own at least 10 houses and 27 flats, according to Guardian reports.

Some £180,000 was raised through crowdfunding to meet the costs of the legal challenge, which was opposed by the Commissioners for HM Revenue and Customs and the Treasury.

The lead claimants were Steve Bolton, founder of Platinum Property Partners, and fellow landlord Chris Cooper, who is also an airline cabin crew member.

They said in a joint statement: "We are outraged by the court's decision. It has completely missed the opportunity to protect tenants, landlords and the housing market from the disastrous consequences of Section 24.

"From April 2017 the negative impact of this previously failed tax experiment from Ireland, where rents increased by 50% over a three year period, will be felt far and wide.

"Sadly it will be tenants who are hit hardest; they are set to see unprecedented rent increases over the coming months and years, which will be a very clear and direct consequence of this ludicrous legislation."