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  • FIRST POST
    • ThomasAsh
    • By ThomasAsh 8th Oct 16, 10:27 PM
    • 4Posts
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    ThomasAsh
    Changes to landlord tax
    • #1
    • 8th Oct 16, 10:27 PM
    Changes to landlord tax 8th Oct 16 at 10:27 PM
    Could someone tell me if I am working this out incorrectly regarding changes to how landlords will be taxed as of 2020 as I'm trying to understand how much of an impact these changes could have

    Currently how the tax is applied (basic model)
    Rent income £450
    Mortgage cost £350
    Profit £100

    £100 is taxable at either 20/45% percent so amount paid would be £20/45?

    2020

    Rent income £450
    Mortgage cost £350
    Profit £100

    All turnover is taxable so 20/45% of the £450 is £90/202.50? Eliminating nearly all profit or resulting in a loss.

    Firstly have I got this wrong?

    If so is this not just going to cause high rents? Or tenants trying to keep upand being evicted?
    If this causes landlords to sell up then where will all these buyers emerge from?
    There are tenants that live month to month that have to rent and will have great difficulty ever getting a deposit together so where would they go?

    How do you see all this landing?
    Last edited by ThomasAsh; 08-10-2016 at 10:41 PM. Reason: Correction
Page 1
    • Thrugelmir
    • By Thrugelmir 8th Oct 16, 10:42 PM
    • 51,207 Posts
    • 42,983 Thanks
    Thrugelmir
    • #2
    • 8th Oct 16, 10:42 PM
    • #2
    • 8th Oct 16, 10:42 PM
    Interest can only be offset against income at a 20% rate. You'll only be affected if your income falls in the higher rate bands of 40% or 45%.
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • ThomasAsh
    • By ThomasAsh 8th Oct 16, 11:07 PM
    • 4 Posts
    • 0 Thanks
    ThomasAsh
    • #3
    • 8th Oct 16, 11:07 PM
    • #3
    • 8th Oct 16, 11:07 PM
    So when all the changes are implemented what will change if anything for a 20% taxpayer?
    And what about higher rate taxpayers?
    Last edited by ThomasAsh; 08-10-2016 at 11:08 PM. Reason: Spell
    • Thrugelmir
    • By Thrugelmir 8th Oct 16, 11:33 PM
    • 51,207 Posts
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    Thrugelmir
    • #4
    • 8th Oct 16, 11:33 PM
    • #4
    • 8th Oct 16, 11:33 PM
    Lots of information here.

    https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlords-how-its-worked-out-including-case-studies#cases-studies
    “A man is rich who lives upon what he has. A man is poor who lives upon what is coming. A prudent man lives within his income, and saves against ‘a rainy day’.”
    • Bluebirdman of Alcathays
    • By Bluebirdman of Alcathays 8th Oct 16, 11:36 PM
    • 2,677 Posts
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    Bluebirdman of Alcathays
    • #5
    • 8th Oct 16, 11:36 PM
    • #5
    • 8th Oct 16, 11:36 PM
    Your basic model is only correct if you have an interest only mortgage. If you have a repayment mortgage it's way off.
    • Crashy Time
    • By Crashy Time 9th Oct 16, 5:34 PM
    • 2,907 Posts
    • 1,686 Thanks
    Crashy Time
    • #6
    • 9th Oct 16, 5:34 PM
    • #6
    • 9th Oct 16, 5:34 PM
    http://www.housepricecrash.co.uk/forum/index.php?/topic/207774-buy-to-let-investors-to-challenge-tax-hike-in-court-merged-threads/&page=37
    • nubbins
    • By nubbins 9th Oct 16, 6:22 PM
    • 632 Posts
    • 852 Thanks
    nubbins
    • #7
    • 9th Oct 16, 6:22 PM
    • #7
    • 9th Oct 16, 6:22 PM
    The HPC morons appear to pinning their hopes of a crash because of section 24, unfortunately for them prices will have probably risen another 30% by 2020
    • theartfullodger
    • By theartfullodger 9th Oct 16, 6:42 PM
    • 8,343 Posts
    • 10,899 Thanks
    theartfullodger
    • #8
    • 9th Oct 16, 6:42 PM
    • #8
    • 9th Oct 16, 6:42 PM
    ..... how landlords will be taxed as of 2020 as.....................
    Originally posted by ThomasAsh
    Don't spend too much time on this: Big secret: The rules on taxing landlords will change, again, before 2020...

    Don't tell anyone else mind...
    • brit1234
    • By brit1234 9th Oct 16, 9:14 PM
    • 5,111 Posts
    • 11,905 Thanks
    brit1234
    • #9
    • 9th Oct 16, 9:14 PM
    • #9
    • 9th Oct 16, 9:14 PM
    Don't spend too much time on this: Big secret: The rules on taxing landlords will change, again, before 2020...

    Don't tell anyone else mind...
    Originally posted by theartfullodger
    Yes you have the Basel III clamp down on buy to let coming too, especially for those highly geared/debted.
    Scams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
    • Fedupoflease
    • By Fedupoflease 9th Oct 16, 10:09 PM
    • 9 Posts
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    Fedupoflease
    What's the basel clampdown??
    • Jack Johnson the acorn
    • By Jack Johnson the acorn 9th Oct 16, 10:14 PM
    • 1,008 Posts
    • 1,029 Thanks
    Jack Johnson the acorn
    Yes you have the Basel III clamp down on buy to let coming too, especially for those highly geared/debted.
    Originally posted by brit1234
    It's a shame you don't post more on the Debate board Brit.... Is it because of that silly 50% off by xmas thread?
    • Crashy Time
    • By Crashy Time 10th Oct 16, 11:28 AM
    • 2,907 Posts
    • 1,686 Thanks
    Crashy Time
    The HPC morons appear to pinning their hopes of a crash because of section 24, unfortunately for them prices will have probably risen another 30% by 2020
    Originally posted by nubbins

    It is just one of many straws in the wind, Trump, EZ banks, benefit cuts etc.
    • Fedupoflease
    • By Fedupoflease 10th Oct 16, 12:22 PM
    • 9 Posts
    • 0 Thanks
    Fedupoflease
    Is it true the basel clampdown means anyone with less than 50% equity in their properties will be in trouble?
    • Crashy Time
    • By Crashy Time 10th Oct 16, 12:54 PM
    • 2,907 Posts
    • 1,686 Thanks
    Crashy Time
    Is it true the basel clampdown means anyone with less than 50% equity in their properties will be in trouble?
    Originally posted by Fedupoflease

    http://forums.moneysavingexpert.com/showthread.php?t=5405916
    • Crashy Time
    • By Crashy Time 10th Oct 16, 12:59 PM
    • 2,907 Posts
    • 1,686 Thanks
    Crashy Time
    http://www.housepricecrash.co.uk/forum/index.php?/topic/208169-bcbs-risk-weights/&page=1
    • nubbins
    • By nubbins 10th Oct 16, 1:19 PM
    • 632 Posts
    • 852 Thanks
    nubbins
    It is just one of many straws in the wind, Trump, EZ banks, benefit cuts etc.
    Originally posted by Crashy Time
    I've been hearing similar since the early 90's when I bought my first little flat. In that time we've had high IR's, lots of wars, 911, isis, 2008 crash etc etc etc and yet that little flat is worth x5
    • Bluebirdman of Alcathays
    • By Bluebirdman of Alcathays 10th Oct 16, 1:25 PM
    • 2,677 Posts
    • 2,917 Thanks
    Bluebirdman of Alcathays
    I've been hearing similar since the early 90's when I bought my first little flat. In that time we've had high IR's, lots of wars, 911, isis, 2008 crash etc etc etc and yet that little flat is worth x5
    Originally posted by nubbins
    Don't forget SARS, Michael Jackson dying and Bruce Jenner chopping off his pecker. Yet still Crashy waits, thinking the next event will be the big thing that sets off his apocalyptic chain of events. If he'd just bought by now he could have paid off the mortgage!
    • Crashy Time
    • By Crashy Time 11th Oct 16, 3:07 PM
    • 2,907 Posts
    • 1,686 Thanks
    Crashy Time
    I've been hearing similar since the early 90's when I bought my first little flat. In that time we've had high IR's, lots of wars, 911, isis, 2008 crash etc etc etc and yet that little flat is worth x5
    Originally posted by nubbins

    Simple question, as you were around in the 90`s - Did the average person have as much cheap credit to play with back then as they did in the early 2000`s, when this mega-bubble started to inflate? Also I don`t recall hearing anything remotely similar to the financial mess we are in now back then, yes there were economic "events" and ups and downs but the average person was never so burdened down with debt as they are now.
    • Crashy Time
    • By Crashy Time 13th Oct 16, 12:40 PM
    • 2,907 Posts
    • 1,686 Thanks
    Crashy Time
    http://www.lettingfocus.com/blogs/2016/09/osbornes-landlord-tax-is-not-a-turnover-tax/
    • Crashy Time
    • By Crashy Time 13th Oct 16, 3:02 PM
    • 2,907 Posts
    • 1,686 Thanks
    Crashy Time
    http://www.propertytribes.com/ireland-axes-the-tenant-tax-in-2017-budget-t-127626759.html#pid267451


    Ohhooo...could they do a U-Turn here, HPC will be shocked and awed that day as the HPI faithful live to fight another day......
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