if Goerge Osbourne takes away tax benefit for BTL won't rents just go up?

TheBlueHorse

or am I missing something?

Thrugelmir

What tax benefit?

antrobus

Thrugelmir wrote: »

What tax benefit?

Presumably, tax relief on interest.

Killerseven

This is the way things are going for sure, lots of ways for the government to get more profit from property owners.

The next thing is cap gains even on your own home.

Graham_Devon

Thrugelmir wrote: »

What tax benefit?

Offsetting mortgage interest payments. Claiming for wear and tear - even if there wasn't any cash spent on wear and tear. Loopholes that allow the richer end of BTL to avoid capital gains.

Tax breaks for BTL's are estimated to "cost" the rest of us £5bn a year. (Inter generational Foundation report in 2013).

Though this article in 2015 puts the total tax loss at £14bn
http://www.theguardian.com/politics/2015/may/26/landlords-14bn-tax-breaks-buy-to-let-expansion-mortgage-interest

HappyMJ

TheBlueHorse wrote: »

or am I missing something?

Yes rents will have to increase and therefore the HB bill so no gain there.

Physics

Rental rates are set by what the market will pay, not how much it costs to run a rental business.

CLAPTON

the most probable result is
-an increase in price but not equal to the loss in tax
-some tenants down sizing
-some landlords selling up
-some modest increase in OO

there may be unintended effects
-the interaction with housing benefits
-maybe some (lazy) landlords will realise they have been undercharging and so will hike prices even more

chucknorris

Physics wrote: »

Rental rates are set by what the market will pay, not how much it costs to run a rental business.

The market rent rate is a function of supply and demand, if the ability to claim mortgage interest was withdrawn (it won't be) there would be a very significant reduction in supply. So rents would increase, not so much because landlords put the rents up, but because the supply of property available for rent would be reduced.

gazter

Killerseven wrote: »

This is the way things are going for sure, lots of ways for the government to get more profit from property owners.

The next thing is cap gains even on your own home.

Thats a big one. Remember, the biggest gainers in the boom that resulted in the bust, was for those who bought their homes. Getting an extraordinary capital gain free of tax. Unlike those bankers and their pesky bonuses.

mwpt

chucknorris wrote: »

The market rent rate is a function of supply and demand, if the ability to claim mortgage interest was withdrawn (it won't be) there would be a very significant reduction in supply. So rents would increase, not so much because landlords put the rents up, but because the supply of property available for rent would be reduced.

Why would the supply of property to rent be reduced? Landlords selling up? Does that mean a reduction in price for buyers? And if someone buys, that is one less person wanting to rent.