118 Landlords Panic and try lobbying MP's yet again

Graham_Devon

It does make some sense.

Houses are basically homes. They are being rented out as home. You have investors working within the same market as private individuals, taking the same products (mortgages) to buy the homes.

Can't really be compared with commerical buildings.

padington

Fella wrote: »

Alister Heath is convinced this is just the beginning:

http://www.telegraph.co.uk/finance/budget/11730158/The-faulty-logic-behind-George-Osbornes-living-wage.html

Has the Chancellor decided that he wants to eliminate the tax deductibility of interest, for property as well as for all other businesses? His decision to start the process of restricting tax deductibility for landlords is now almost bound to lead to its total abolition in that sector at least.

Note that he is against this, so unlike some on this board is not simply saying what he would like to happen....

I wonder what the inevitable consequences are if these idea's do indeed become reality.

High rents... ? Cheaper houses.... ? More homeowners ...? More Tory sympathetic voters ... More business friendly politics .... More economic stability ... More investment .... More jobs ...

Tories branding themselves the 'The party of the working class '

Labour have been so outmanoeuvred its frankly incredible.

Jon_B_2

They've caused ructions and infighting amongst Labour as well over this support of the working tax credit limit. GO could not have imagined the budget playing out so well.

Talk about a kicking when the enemy is already down.

cells

Graham_Devon wrote: »

It does make some sense.

Houses are basically homes. They are being rented out as home. You have investors working within the same market as private individuals, taking the same products (mortgages) to buy the homes.

Can't really be compared with commerical buildings.

individuals dont live in homes as a business so it makes sense that mortgage interest is not cost deductible for individuals in the same way as food or electricity or gas or water or insurance in not for individuals but is for a company

Generali

Fella wrote: »

Alister Heath is convinced this is just the beginning:

http://www.telegraph.co.uk/finance/budget/11730158/The-faulty-logic-behind-George-Osbornes-living-wage.html

Has the Chancellor decided that he wants to eliminate the tax deductibility of interest, for property as well as for all other businesses? His decision to start the process of restricting tax deductibility for landlords is now almost bound to lead to its total abolition in that sector at least.

Note that he is against this, so unlike some on this board is not simply saying what he would like to happen....

You couldn't remove interest deduction as a cost for regular businesses. For a start all the banks would go bust as would pretty much every other capital intensive business: infrastructure, utilities, pharma...

greensalad

Boo hoo. Rich person made marginally less rich by tiny amount. Cry me a river.

cells

Generali wrote: »

You couldn't remove interest deduction as a cost for regular businesses. For a start all the banks would go bust as would pretty much every other capital intensive business: infrastructure, utilities, pharma...

Thats a very good point

But BTLs are also capital intensive. Sometomes upto or even exceeding 80% LTV. I supppse the difference is that there is an exit route in the form of selling up which might be impossible for a steel plant or similar

also will be interesting to see what happens to reits
also what happens to councils and housing associations. It would be bonkers to exempt them. That wpipd be cherry picking who does and does not pay a certain tax

antrobus

cells wrote: »

...also what happens to councils and housing associations. It would be bonkers to exempt them. That wpipd be cherry picking who does and does not pay a certain tax

But councils and housing associations are exempt, aren't they?

As far as I'm aware Local Authorities are specifically exempt from both IT and CT, so the tax allowability of any interest paid isn't an issue. HAs similarly come under quite different rules; many of them are registered charities.

kabayiri

I suppose this Mark Alexander guy is just doing what his members expect : trying to protect their interests.

Presumably he is happy with the 95% of other content in the budget, and understands why we needed an emergency budget designed to save billions of pounds.

He and his members need to see the bigger picture and accept that the good times have got slightly less good, that's all. It has been a pretty good decade plus for these people after all.

Generali

cells wrote: »

Thats a very good point

But BTLs are also capital intensive. Sometomes upto or even exceeding 80% LTV. I supppse the difference is that there is an exit route in the form of selling up which might be impossible for a steel plant or similar

also will be interesting to see what happens to reits
also what happens to councils and housing associations. It would be bonkers to exempt them. That wpipd be cherry picking who does and does not pay a certain tax

REITs are under a separate tax regime as they distribute almost all of their earnings as income (90% in most countries).

I don't know how many REITs have debt. I know the ones we run have no borrowing at all. Each dollar buys a dollar of underlying REIT investments. It may well be that those underlying investments are leveraged so REIT investors in our funds are taking on a leveraged risk they don't necessarily understand.

Having said that, these are equity investments into leveraged companies so the most you can lose is your investment. That's the great advantage of buying equity in leveraged companies over buying equity using debt directly.

One day a bunch of BTL investors will discover that risk is real.