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Affordable Housing, Section 106 query.

24

Comments

  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    Bantex wrote: »
    But all that they give away will be immediately deducted from profits, thereby saving them tax.



    why don't you give all your income away : if you use gift aid you save on tax.
  • Bantex_2
    Bantex_2 Posts: 3,317 Forumite
    CLAPTON wrote: »
    why don't you give all your income away : if you use gift aid you save on tax.
    I do give away some of my income and it is added to via gift aid. Not sure what your point is though.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    edited 17 September 2014 at 6:04PM
    Bantex wrote: »
    I do give away some of my income and it is added to via gift aid. Not sure what your point is though.



    you will know how little tax one gets back in relation to the cost of the affordable housing levies
  • ImACarer
    ImACarer Posts: 37 Forumite
    Thing is with this affordable housing (and I have been looking at it for shared ownership), that houses that they build work out at nearly the same as the really nice house next door that is on the open market and you are getting 1/2 of the quality and size of the open market house. For example, a 3 bedrooms will be going for £220,000 and 100% of the SO house will be about £190,000. OK, you are only buying 25-75% of it but still. So there is a lot of profit for someone somewhere. The housing association to be exact. Then there is section 106 criteria. So all in all it is not really fixing the shortness in housing problem.
  • Bantex_2
    Bantex_2 Posts: 3,317 Forumite
    ImACarer wrote: »
    Thing is with this affordable housing (and I have been looking at it for shared ownership), that houses that they build work out at nearly the same as the really nice house next door that is on the open market and you are getting 1/2 of the quality and size of the open market house. For example, a 3 bedrooms will be going for £220,000 and 100% of the SO house will be about £190,000. OK, you are only buying 25-75% of it but still. So there is a lot of profit for someone somewhere. The housing association to be exact. Then there is section 106 criteria. So all in all it is not really fixing the shortness in housing problem.
    So it appears that the SO place is about 15% cheaper.
  • princeofpounds
    princeofpounds Posts: 10,396 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I do give away some of my income and it is added to via gift aid. Not sure what your point is though.

    I imagine that the point clapton was, very correctly, making is that tax deductibility of costs is no real kind of compensation. It merely softens the blow of the extortion.

    If a Section 106 agreement takes away 40k of your profits, not having to pay 21% of 40k as tax still means 31.4k net has been taken away from you compared to scenario where no 106 exists.
  • ImACarer
    ImACarer Posts: 37 Forumite
    Bantex wrote: »
    So it appears that the SO place is about 15% cheaper.

    Yes, but you getting a lot less than 15% for your money.
  • Bantex_2
    Bantex_2 Posts: 3,317 Forumite
    ImACarer wrote: »
    Yes, but you getting a lot less than 15% for your money.
    In what way?
  • ImACarer
    ImACarer Posts: 37 Forumite
    Bantex wrote: »
    In what way?

    Because, like I said. A small 3 bedroom house they are selling on the SO (100% price) for £189,000, but a lot large property house in the same development that you can only buy from say, taylor wimpy selling for an £30k more. In comparison the SO house should only be around £150,000.
  • purch
    purch Posts: 9,865 Forumite
    Unfortunately you will find that in most cases where shared equity, or discounts are offered, they somehow manage to value the properties concerned much higher than they would fetch on the open market.

    It's not right, but it is the norm.
    'In nature, there are neither rewards nor punishments - there are Consequences.'
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