Don't sell rent.

nearlynew

Cleaver wrote: »

Maybe I agree with you on that.



This is where I start to scratch my head when it comes to people's logic around BTL on this forum. What does the amount of effort someone puts in to starting and running a business have to do with the amount of tax they should or shouldn't pay? Where do we try to apply this logic to any other business in life? Let's say two people find themselves with £50,000. One of them decides to set up a hairdressers. This involves a lot of personal hard work: training, learning a skill, finding premises, finding and managing staff, advertising, learning and doing accounts etc. etc. It's 12 hour gruelling days. The other person decides to buy a laptop and randomly invest in shares.

At the end of five years the hairdresser has made a gross profit of £80,000 but the investor has made £180,000.

Should we start to tax these people differently based on the amount of effort each one put in to starting their business? How do you do this? Do you ask them how much trouble it was to start doing what they're doing and tax accordingly? I have no idea how you'd do this.

So you can compare the BTL tax system with that of the 'average joe', but I'd compare it to any other business. We all have the same opportunities in life, we all know the tax rules and we can all set up whatever business we like.



My understanding is that BTL is no different from any other business: if you remortgage a property you own and then invest that money in any business (and can prove that all the money was used for that) then you can claim tax relief on the interest you pay on that loan. So that can be a BTL, a hairdressers, buying shares or anything else.

Out of interest, why would 'these guys' need a break but BTL landlords don't? Because of the effort thing again? If I remotgaged my house to buy, for example, a racehorse would you say this is a good thing because I tax break?

I've been a landlord for over 20 years but I am not a HPI cheerleader.

In fact, I want pices to fall.


It is very telling that the HPI cheerleaders on this forum have not been able to answer your question.

chucknorris

nearlynew wrote: »

It is very telling that the HPI cheerleaders on this forum have not been able to answer your question.

I'm not sure what point you are trying to make here. Cleaver asks a few questions in his post, if you point out the one that you are referring to I will attempt to answer it.

Cleaver

nearlynew wrote: »

I've been a landlord for over 20 years but I am not a HPI cheerleader.

In fact, I want pices to fall.

It is very telling that the HPI cheerleaders on this forum have not been able to answer your question.

As far as I can see on this thread Pimperne, chuck and myself were having a civil debate about the tax rules for landlords in comparison to other businesses. I think they've made some good points.

Who has mentioned HPI cheerleading (apart from you) and why would they be able to think reasons why tax breaks for landlords should be any different from any other business? As far as I'm aware, most landlords (who I presume you class as HPI cheerleaders, aside from yourself of course) are happy with their tax status being the same as other business owners.

Cleaver

Pimperne1 wrote: »

I think anyone who puts a lot of effort into a small business does deserve a break as they are the lifeblood of this country's economy. I don't think you can deny that being responsible for a let property 24/7 is anything like as onerous as cutting hair 5 days a week.

I don't think I have tried to say that owning a home to rent is as difficult as setting up a hairdressers. If you asked me to guess I would say that setting up a hairdressers takes about ten times as much skill, effort and talent than setting up a BTL business.

But the question I'm asking you is whether there should be different tax rules for different businesses depending on how 'worthy' they are, in terms of the effort and skill required to run them? I would say no, as that's impossible to implement, but I assume you see it differently?

Pimperne1

Cleaver wrote: »

I don't think I have tried to say that owning a home to rent is as difficult as setting up a hairdressers. If you asked me to guess I would say that setting up a hairdressers takes about ten times as much skill, effort and talent than setting up a BTL business.

But the question I'm asking you is whether there should be different tax rules for different businesses depending on how 'worthy' they are, in terms of the effort and skill required to run them? I would say no, as that's impossible to implement, but I assume you see it differently?

I agree with you but if it were not impossible to implement I would be all for people being taxed based upon the amount of effort they put in.

nearlynew

Cleaver wrote: »

I don't think I have tried to say that owning a home to rent is as difficult as setting up a hairdressers. If you asked me to guess I would say that setting up a hairdressers takes about ten times as much skill, effort and talent than setting up a BTL business.

But the question I'm asking you is whether there should be different tax rules for different businesses depending on how 'worthy' they are, in terms of the effort and skill required to run them? I would say no, as that's impossible to implement, but I assume you see it differently?

In amongst all that lot, you have answered your own question

Cleaver

nearlynew wrote: »

In amongst all that lot, you have answered your own question

In what way? I should add that not only would I not tax businesses differently because you couldn't implement it, I also don't agree with the principle of it. It shouldn't matter if you invested 5,000 hours or 5 hours in a business idea, if it makes money then you get taxed on the profit.

C'mon nearly, you're a landlord. How would you change the tax system? If you can give an answer without soundbytes and w*nky phrases that'd be great.

Pimperne1

REAL_MEN_DONT_RENT wrote: »

When your situation changes and you need to move it is a good lifestyle choice to not sell but let out your home because when you move to your new job then you'll have two distinct income streams. It's always made clear economic and financial sense to hold onto property at all costs once on the ladder. The case in point is just imagine how infuriated all those hpcers are who Sold To Rent way back in 2002. How much money they have lost jumping off the best investment vehicle in living memory.

Oh no you don't. They all invested their equity in the commodity that has done best since then and don't forget the pound has been trashed since then and anyway they've been renting at considerably less than they would pay mortgage and the boiler blew up four times during that period and all they had to do was ring the landlord (who incidentally is a money grabbing git who does nothing for his rent (except get the boiler fixed four times since we STRd) and anyway prices are going to crash so sell now before its too late.

twadge_face

REAL_MEN_DONT_RENT wrote: »

Good article, good find. Worth pinning.

Your username!!!!! LOL!

Davesnave

!!!!!!_face wrote: »

Your username!!!!! LOL!

You can twalk! :rotfl: