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Should HPI be taxed as Capital Gains
Comments
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For shares it is harder avoid. If you are buying a house and selling an old one, just like in shares if you sell and buy shares in a company within a very short period no CGT is paid because the price paid is maintained at the original purchase price of the first house. Only tax is paid if you downsize, i.e. money stays in your account after buying the new place.
From what you and others have said, it doesn't seem that this loophole exists for investment properties, and so there is no reason to expect it to exist if the existing rules are extended to cover homes.0 -
Then the obvious one is to bed and breakfast with the spouse every year, twice a year. Then gains fall within CGT allowances. Alternatively transfer the property to a holding company and then definitely write off capital expenditures against gains.From what you and others have said, it doesn't seem that this loophole exists for investment properties, and so there is no reason to expect it to exist if the existing rules are extended to cover homes.0 -
Same place as everywhere else in the world: bank lending.
Have you seen the cost of building a house? £100k will build you a huge place. The problem is the cost of building land. Farm land is less substantially than £10k an acre I believe. Building land many times that. Let people build on some farm land and the cost will fall dramatically. Don't just sit there expecting the Government to do
it all for you.
Well the banks don't seem to be lending at the moment, hence the governments help to buy schemes. Even when they were lending, all this model did was to beggar the country.
As others have said, if farmland is released for building plots then the cost of the land doubles as the various housing company's bid for it. There is also no guarantee that the housing companies would actually build on the land, they could just 'bank' it. They could also just build on pockets of land, restricting the supply. It's not in the house builder's interests to push down house prices.0 -
Perhaps those who want to be mobile for work would find renting preferable to buying and the workforce would be even more mobile and flexible?
What if you dont plan to be mobile but lose your job and cant find work locally?Faith, hope, charity, these three; but the greatest of these is charity.0 -
Then the obvious one is to bed and breakfast with the spouse every year, twice a year. Then gains fall within CGT allowances. Alternatively transfer the property to a holding company and then definitely write off capital expenditures against gains.
'Bed and breakfast' what every year, twice a year?
You'd have to be mortgage free to transfer the property to a holding company, as the lenders would not agree to it. Hence the reason most BTL landlords don't operate within a limited company framework (amongst other reasons).
What expenditures could you write off against gains?0 -
Well the banks don't seem to be lending at the moment, hence the governments help to buy schemes. Even when they were lending, all this model did was to beggar the country.
As others have said, if farmland is released for building plots then the cost of the land doubles as the various housing company's bid for it. There is also no guarantee that the housing companies would actually build on the land, they could just 'bank' it. They could also just build on pockets of land, restricting the supply. It's not in the house builder's interests to push down house prices.
why do builders actually build a single house if they make bigger profits by not building?
at the moment the big builders are announcing big increase in profits : amazingly enough that is because they are selling more properties0 -
It would be an incentive to avoid the tax to own the property through a company as then you can offset gains and expenditures (of new properties or anything else) against the gains from the property sale due to company tax laws.'Bed and breakfast' what every year, twice a year?
You'd have to be mortgage free to transfer the property to a holding company, as the lenders would not agree to it. Hence the reason most BTL landlords don't operate within a limited company framework (amongst other reasons).
What expenditures could you write off against gains?
Being mortgage free will be a huge advantage for the swapping the owner of the property twice a year (bed and breakfasting). Just move from one person hold for the required time then move back. Then the purchase price of the property is effectively reset and gains aborbed by the CGT allowance of both persons.0 -
why do builders actually build a single house if they make bigger profits by not building?
at the moment the big builders are announcing big increase in profits : amazingly enough that is because they are selling more properties
Yes, amazingly enough they held onto their land during the downturn and only started to build when house prices started to go up.0 -
It would be an incentive to avoid the tax to own the property through a company as then you can offset gains and expenditures (of new properties or anything else) against the gains from the property sale.
Being mortgage free will be a huge advantage for the swapping the owner of the property twice a year (bed and breakfasting). Just move from one person hold for the required time then move back. Then the purchase price of the property is effectively reset and gains aborbed by the CGT allowance of both persons.
If it so easy to set up a limited company, then why don't most BTL landlords do it now?
Aside from that, would people really go to the hassle of setting up a company, getting an accountant, doing tax returns, just to save paying tax on gains that would not be there anyway because taxation has put the breaks on runaway HPI?
If you could 'bed and breakfast' in this way, then why don't BTL landlords do it already to avoid capital gains tax? What happens if you move the property to your partner and they split up with you?0
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