How does buying a 2nd home affect tax credits and benefits?

nannytone_2

thats the problem with posting on a public forum i'm afraid.
some people only post to make harsh judgements on other people

diymonkey

I agree it's a public forum, but this forum is to help members who ask questions related to tax and benefits...not to be insulted each time you mention the words "credits" and "benefits".

If certain members are not happy with these situations, then I suggest they post on another forum.

nannytone_2

their reply would be that you also could post on a different forum
i do see their point, if not they way they put it ....
there will be people marginally above the tax credit threshold that cannot afford to buy one property, let alone a second on. yet you are in a position to do this, thanks in part, to tax credits.
i dont blame you in anyway because you are claiming your entitlement and rightly so.
did you really expect there to be no criticism of your intended plan?

just to reiterate ...
Universal Credit will be rolled out to everyone ...
if you then find you will no longer rreceive any financial help ... will you still be able to afford the second property?

diymonkey

Firstly, I can't be blamed for low income in my area, hence the tax credits top up and secondly I've worked throughout my life, paying taxes just like everyone else, thirdly my first property mortgage has been almost cleared, so it allows me to think of my kids future..Now is that a bad thing??

nannytone_2

i'm not criticising. i can just see it from both sides.
the people that do criticise seem to think that you are fortunate to be able to buy one property when many can't afford one at all.
in many cases, those that get tax credits can't even afford to rent.

diymonkey

Yes, I understand, but I have spent the last 17+ years paying off a mortgage just like everyone else and bought the property around the last house price with high interest rates, so it's a bit unfair to assume I've had it easy.

nannytone_2

i don't think that people are saying that.
they seem to think it unfair that you stand to gain in quite a major way ( nby having a large asset) paid for in part by other earners. so their tax money is buying you a second house.
im not a home owner, i worked for 20 tears but as a single parent, was never in a position to buy.
i am now unable to work through disability ( i am blind) and many people think i should be grateful for every penny i receive.
i do appreciate it, but i worked too long and hard to feel like i need to be grateful for something i worked for

diymonkey

Nannytone, I could understand if I was on 100% dependant on benefits, trying to get a house, but because I've worked throughout my life, I believe I deserve to reap the benefits of my hard work and if people are finding it difficult to accept this, then I'm sorry, but they can take a jump for all I carw. I haven't judged anyone and don't expect to be judged by anyone else.

Right now as we speak, our own PM and MPs are screwing us for every penny by using schemes to avoid tax and instead of fighting this form of injustice, we are fighting each other.. Tut tut tut

Cameron quietly ditches plan to release details ahead of the Election! http://www.dailymail.co.uk/news/article-2915902/I-won-t-tell-tax-pay-says-PM-Cameron-quietly-ditches-plan-release-details-ahead-Election.html @MailOnline

NYM

Do you have sufficient income to service the mortgage if you intend to get one ?

To get a buy-to-let mortgage you must have a good credit record and not be stretched too much on your other borrowings such as your existing mortgage and any credit cards or other borrowings. You are likely to find it harder to get a buy-to-let mortgage unless you earn at least £25,000 a year.

The anticipated rental income will probably have to be a quarter to a third higher than your mortgage payment and rental income that is higher than your mortgage interest payment is subject to income tax.

Working tax/child tax credits can be included in the affordability criteria, but will only accepted if all named on the mortgage are the same as all named on the award notice.
Income used is the lowest figure for each kind of tax credit.

FBaby

Firstly, I can't be blamed for low income in my area, hence the tax credits top up and secondly I've worked throughout my life, paying taxes just like everyone else, thirdly my first property mortgage has been almost cleared, so it allows me to think of my kids future..Now is that a bad thing??

The fact you work all your life doesn't mean that those tax payers who have done the same but don't rely on tax credits to top up should support you to be able to gain a second property when they themselves can't afford to do so. Can't you see that if it wasn't for those earning much more than you supporting you to allow you to get an income closer to them, you wouldn't be able to consider what you are doing.

But going back to advice which is what you wanted. As it has been pointed out, soon, those earning a second property won't be elligible for tax credits any longer, so make sure you take this into account and consider whether in two years or so, you will be able to do without it.