Capital Gains Tax up to 40%!

Vincenzo

kennyboy66 wrote: »

Why not ?

The taxation system "discriminates" against fuel, tobacco, alcohol.
It "discriminates" for food (no VAT), domestic fuel, children clothes and education.

These taxes are (primarily) on the end user, not the service provider. That would be equivalent to adding vat to rent to encourage people to buy instead.

Harry_Powell

kennyboy66 wrote: »

Spread bets aren't allowed in a SIPP.

Who will think of the poor dsicriminated spread bettors ?

Betting on the horses aren't allowed either, nor is gambling at a casino. Your point is?

Pennywise

Harry_Powell wrote: »

It's not 'according to Harry' it's according to the law. There are stipulations in both SIPPS and Cap Gains that deliberately exclude the business of residential BTL and therefore by any measure, this is discriminatory. No other forms of business are excluded, hence the rules are discriminatory against residential BTL.

Whether this discrimination is a good thing or not is for you to discuss, but you can't argue the point that there are discriminatory rules in connection with residential BTL.

OK then, but if you want BTLs to be a "business" for SIPPS and CGT, then logic dictates you want them to be a "business" for income tax and national insurance as well. A self employed business owner currently pays NIC at 8%, so I assume you wouldn't mind BTL'ers paying NIC at 8% of their "profits" on top of the 20/40% income tax would you? You can't pick & choose the good and bad points.

Harry_Powell

Pennywise wrote: »

OK then, but if you want BTLs to be a "business" for SIPPS and CGT, then logic dictates you want them to be a "business" for income tax and national insurance as well. A self employed business owner currently pays NIC at 8%, so I assume you wouldn't mind BTL'ers paying NIC at 8% of their "profits" on top of the 20/40% income tax would you? You can't pick & choose the good and bad points.

What's all this 'you want' business? You're building up a 'straw man' argument based on some wild idea that I feel it's a bad thing that residential BTL is discriminated against. I haven't expressed any opinion either way, I have simply pointed out that the discrimination exists. End of.

StevieJ

kennyboy66 wrote: »

.

BTL would be a great social benefit if it added to the stock of rented housing. It doesn't. It moves stock from owner occupied to the rented sector.
.

I was of the impression that a great many of those inner city flats were built with BTL investors in mind, could be wrong though.
I have just noticed that you mention that yourself above

Vincenzo

StevieJ wrote: »

I was of the impression that a great many of those inner city flats were built with BTL investors in mind, could be wrong though.

Yes, and I take Kennyboy66's point that there was oversupply of certain types of proeprties in certain areas. I remember advising a friend not to buy new build flats in Manchester a few years back, he didn't listen and is sitting on a hefty loss now.

I expect much of the oversupply will be taken on by Housing Associations and Councils. Ironic really....

Thrugelmir

Vincenzo wrote: »

Yes, and I take Kennyboy66's point that there was oversupply of certain types of proeprties in certain areas. I remember advising a friend not to buy new build flats in Manchester a few years back, he didn't listen and is sitting on a hefty loss now.

I expect much of the oversupply will be taken on by Housing Associations and Councils. Ironic really....

Is it an oversupply? Developers set prices too high as to be out of reach of FTB's. BTL investors weren't interested as investment return wasn't there. At the right price the properties would have sold.

The fact that HA's and Councils are purchasing empty properties comes back to the social aspect of the discussion raised by Dopester.

kennyboy66_2

Vincenzo wrote: »

Yes, and I take Kennyboy66's point that there was oversupply of certain types of proeprties in certain areas. I remember advising a friend not to buy new build flats in Manchester a few years back, he didn't listen and is sitting on a hefty loss now.

I expect much of the oversupply will be taken on by Housing Associations and Councils. Ironic really....

Why will councils do this ? Most northern cities have empty council / HA properties as it is.
They may also have high waiting lists - but these are mainly people who are already described as "adequately housed".

If there was a desire for these properties, then people surely would have taken then up and claimed housing benefit.

Vincenzo

Thrugelmir wrote: »

Is it an oversupply? Developers set prices too high as to be out of reach of FTB's. BTL investors weren't interested as investment return wasn't there. At the right price the properties would have sold.

The fact that HA's and Councils are purchasing empty properties comes back to the social aspect of the discussion raised by Dopester.

I don't think developers purposely priced their product so that it would not sell. The costs of purchasing the land, planning and building the units with a reasonable profit margin dictated the price at which they could offer the properties. The market held up pretty well for quite some time, longer than I expected (ref. to new build flats).

Thrugelmir

Vincenzo wrote: »

I don't think developers purposely priced their product so that it would not sell. The costs of purchasing the land, planning and building the units with a reasonable profit margin dictated the price at which they could offer the properties. The market held up pretty well for quite some time, longer than I expected (ref. to new build flats).

It wasn't meant as a comment directed directly at the developers themselves. More an observation on the market in general.

Property developers have considerable margin when building large scale developements. The issue more recently was that as property prices rose it was actually the cost of land which commanded a premium. Not the build, marketing and funding costs.

Close to where I live. A HA has recently acquired an entire new mixed housing developement of 378 units (2/3/4 bed houses). As the lack of demand evapourated. There is good rental demand locally but lack of finance and return seems to have caused BTL interest to evarpourate.