Cherie Blair is using Human Rights Legislation in her attack on the planned landlord tax.
Ms Blair says it breaches landlords’ human rights.
Tax changes will be introduced starting from next year to prevent small-scale landlords from deducting mortgage interest costs from their tax bill.
This could result in landlords paying tax on more than 100pc of their rental income profit.
Ms Blair’s law firm, Omnia Strategy, claims that the new tax discriminate against individual buy-to-let investors. This is because other forms of investment such as pension funds and insurance companies are able to set costs off against their income, limiting tax to profit.
Omnia goes on to say that the tax favours corporate landlords, dividing the profession and distorting competition.
Two landlords are bringing the case. Chris Cooper is one of them.
“On the face of it the measures [balancing out buy-to-let] seem reasonable. However, all landlords with big mortgages will be adversely affected, while the wealthiest who don’t need to borrow will be left untouched.
“Some landlords will also be pushed from the lower tax rates into higher rates.”
This means some landlords will be taxed even if they make a loss, due to a loophole that presumes an increase in income based on a theoretical income.
Mr Cooper believes landlords will be forced to increase rents to cover tax, or evict tenants in order to sell up.
The government had until 14th February to respond to the case before the matter moves to judicial review.