BTL tax changes to cost London Landlords over £1B a year

michaels

theEnd wrote: »

I know we can say that all other businesses can offset interest against profits, but I can't think of another business where they're purchasing in direct competition to ordinary people using the same type of finance.

And we are back to the unusual supply situation with housing - lots of other things from cars to food idividuals and busienss both buy the products, howver it is only for housing that supply does not increase to match the addiitonal demand.

Want to buy a lettuce and so does MacDonalds, more lettuces will get grown. Want to buy a car and so does a car sharing club? No problem, a few more cars will be churned out.

movilogo

All new landlords will bypass this rule by buying via limited companies.

Generali

movilogo wrote: »

All new landlords will bypass this rule by buying via limited companies.

Apparently limited companies don't get to claim wear and tear.

Perhaps that means a move towards rented unfurnished accommodation.

cells

movilogo wrote: »

All new landlords will bypass this rule by buying via limited companies.

doubtful as obtaining finance tends to be more difficult and more expensive.

what would be better is a pure residential reit that's geared 4x to represent a 25% down BTL investment. then just buy its shares rather than diy

but I have not come across any such reits (they may exist i havent tried hard to find them)

Generali

cells wrote: »

doubtful as obtaining finance tends to be more difficult and more expensive.

what would be better is a pure residential reit that's geared 4x to represent a 25% down BTL investment. then just buy its shares rather than diy

but I have not come across any such reits (they may exist i havent tried hard to find them)

These sort of funds, such as they exist, tend to be direct property rather than REITs I believe. As a result they tend to have high minimum investments (say $100,000+) and are very illiquid, often with no ability to withdraw funds at all, only a sell down period as the fund winds up after 10-15 years. They're great for pension funds but not so good for the small investor.

I believe there are some decent German residential REITs. I haven't investigated though so can't claim any expertise here.

Personally, if you want a real asset investment, you might want to look at infrastructure funds instead IMHO. I really like very pure infrastructure funds right now.

CLAPTON

Generali wrote: »

Apparently limited companies don't get to claim wear and tear.

Perhaps that means a move towards rented unfurnished accommodation.

companies can claim actual wear and tear but they can't claim a 10% allowance without real spending.

lisyloo

Perhaps that means a move towards rented unfurnished accommodation.

Lanlords need to provide what tenants want or risk cutting themselves off from a large part of the market.
Huge generalisation but in London that probably means furnished lets (as many people are there to work) and outside London that may mean unfurrnished (as people are looking for homes).
LL can of course chose to do whatever they want but it would be foolish to cut yourself off from a lucrative part of the market to pander to minor tax breaks.

antrobus

lisyloo wrote: »

....Huge generalisation but in London that probably means furnished lets (as many people are there to work) and outside London that may mean unfurrnished (as people are looking for homes).....

I'd have thought it was the other way around. Given that there are large corporate landlords in London who typically rent unfurnished.

But I've not seen any stats, so I don't really know either way.

lisyloo

I'm not sure which way round it is, but if tax breaks and meeting lucrative demand don't happen to co-incide then I'd suggest the business needs to be run on the basis of fundamentals and not organised primarily around tax legislation.
Of course sometimes it might work out that they co-incide.

ruggedtoast

movilogo wrote: »

All new landlords will bypass this rule by buying via limited companies.

Going to be hard for them to pull the residential mortgage fiddle they are all so fond of.

I think this is hilarious. The squeals of outrage that BTL investors are being treated like 'normal people' on the internet is a joy to behold.