Cherie Blair of Omnia Strategy LLP, represented claimants and landlords Steve Bolton, chairman of Platinum Property Partners, and Chris Cooper, on behalf of the ‘Axe the Tenant Tax’ group.
The group, which is a crowd-funded coalition of individuals and organisations who represent more than 150,000 landlords, believes that the changes in Section 24 of the Finance (No.2) Act 2015, otherwise known as ‘tenant tax’ will stop buy-to-let finance costs (largely mortgage interest) being a claimable business expense.
Landlords will have to pay extra tax of 20% or more of their mortgage interest payments and the tax they pay might be greater than their profit, leaving them with a rental loss and a cash shortfall. This will only affect individuals who own rental properties in their own names, meaning companies owning buy-to-let property will be excluded.
Cherie Blair said: ‘The Court’s decision that our clients’ legal challenge should not proceed is very disappointing. Steve and Chris, and many others, have dedicated a lot of time and energy into putting forward the best case possible. We know the case has been supported and followed with interest by a large number of individual landlords. Many of these landlords now face challenging times ahead.
‘From the outset, the legal process was just one aspect of our clients’ fight against this unfair measure. Together with their impressive and growing coalition, they will continue to engage with the Government, and the legal team wishes them every success.’
Omnia strategy LLP argued that the tenant tax is unlawful due to the restriction on the landlords’ ability to deduct finance costs as a business expense which can result in an unlawful grant of state aid to corporate landlords.
Mr Bolton and Mr Cooper said: ‘We are outraged by the Court’s decision today. It has completely missed the opportunity to protect tenants, landlords and the housing market from the disastrous consequences of Section 24.
‘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.
‘Now that the legal route has run its course, we will be focussing 100% of our attention and resources on taking our case more forcefully, more powerfully and more directly, right to the heart of government. Our goal is simple: to abolish this tax or to remove the retrospective nature of it. ‘
Axe the Tenant Tax has launched its third crowd-funding campaign to raise money for media, PR and lobbying campaign in an attempt to push pressure on MPs and government