A return to MIRAS - what do you think?

StevieJ

Kohoutek wrote: »

Housing associations and other registered social landlords provide social housing, but the difference is they are run on a not-for-profit basis. That's why I think they should quality for tax relief, and BTL landlords shouldn't.

Well blame Maggie for that one it was her idea to sell off social housing and let BTL take up the slack.

Kohoutek

StevieJ wrote: »

Don't see what the argument is, the govt receive tax income from the profit on BTL, end of - No subsidy there.

Don't you get it? Tax allowances and tax reliefs are subsidies, because the government is partially foregoing their right to collect tax. The government can tax anything it wants, tax relief is a conscious choice to forego tax revenue by the government's taxation policy for social or economic reasons, it's not a obligation.

Kohoutek

StevieJ wrote: »

Well blame Maggie for that one it was her idea to sell off social housing and let BTL take up the slack.

Unfortunately many of the political decisions in the last 30 years were made for short term gain and were bad decisions and that was one of them.

kennyboy66_2

No

CLAPTON wrote: »

The state has no track record of successfully providing rented accommodation in a cost effective or efficient manner.

Other than the millions of council homes in such a poor state that they were bought by the owners.;)

The difficultly is that BTL landlords have no track record of providing rented accommodation in a cost effective or efficient manner either. The BTL model has largely been around buying existing housing stock often competing with first time buyers.
Where BTL has provided new stock, it is mainly seen in the over supply of small city centre flats.

Home ownership is actually falling in the UK. If we believe that having a society of owner occupiers is a good thing then we should tweak the system to achieve this.

One obvious was would be to relax planning laws. It seems odd that we complain when village schools / pubs / shops shut when the obvious solution would be to build more family homes.
Another solution might be to make BTL a less attractive investment. They have done this in Ireland by limiting interest tax relief and I reckon it will happen here.

If I chose to borrow £100k to buy shares, I would not be able to claim interest relief against dividends. This is the real tax comparison with buying an investment property, not spurious guff about hairdressers and electricians.

StevieJ

Kohoutek wrote: »

Don't you get it? Tax allowances and tax reliefs are subsidies, because the government is partially foregoing their right to collect tax. The government can tax anything it wants, tax relief is a conscious choice to forego tax revenue by the government's taxation policy for social or economic reasons, it's not a obligation.

No I don't get it if the house wasn't rented out the govt would be worse off by the tax on rental income less the tax allowances (costs). how is that a subsidy? Now if they also allowed capital allowances BTW the govt needs BTL to house people, if you
think they are going to be building masses of new social housing you better think again.
I take it you are not a householder.
.

Kohoutek

StevieJ wrote: »

No I don't get it if the house wasn't rented out the govt would be worse off by the tax on rental income less the tax allowances (costs). how is that a subsidy? Now if they also allowed capital allowances BTW the govt needs BTL to house people.
.

Because the government has the option of demanding the income tax on the rental income without granting tax relief on mortgage repayments. It's not a natural right to grant tax relief.

In many cases, if it is private housing aimed at people who would otherwise be in social housing - what you said about putting a roof over someone's head - the government is contributing for a proportion of the tenant's rent or all of it through housing benefits, so it is certainly not making any net profit itself.

StevieJ

Kohoutek wrote: »

Because the government has the option of demanding the income tax on the rental income without granting tax relief on mortgage repayments. It's not a natural right to grant tax relief.
.

They could disallow any business expense that they choose, they choose to allow interest on BTL does not tell you something about the govts fiscal policy as it relates to housing and how they see BTL as a neccessity at the current time. Have a thought for Carol, where would she live if there was no BTL?

boliston

No

If they allow tax relief on mortgage interest then it's only fair that they should also allow tax relief for people who rent rather than buy. Failure to do this would be unfair to people who choose to rent.

Kohoutek

StevieJ wrote: »

They could disallow any business expense that they choose, they choose to allow interest on BTL does not tell you something about the govts fiscal policy as it relates to housing and how they see BTL as a neccessity at the current time. Have a thought for Carol, where would she live if there was no BTL?

Yeah like you imply it suggests that the government is unwilling to spend a significant amount of money on social housing, but it doesn't mean it's the right policy, it's just the easy option. I think the government should have spent more developing low-cost housing, instead they stoked a property bubble.

Where would people live without BTL? Well houses would probably be cheaper for FTBs, some of which are probably prices out of the market and have to resort to renting for longer. It's not hard to see how people like Fergus Wilson were responsible for forcing prices up.

StevieJ

boliston wrote: »

If they allow tax relief on mortgage interest then it's only fair that they should also allow tax relief for people who rent rather than buy. Failure to do this would be unfair to people who choose to rent.

I think I sort of agreed with you in a earlier post