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

observingthedebate

it assumes all landlords are highly leveraged which is not at all the case in my experience

Gavin234

cells wrote: »

~700,000 BTLs in London.

I figure wear and tear loss is ~£350 on average = ~£245 million

And I guess the interest rate offset changes will collect an additional = ~£800 million*

Does the budget reveal how they think changes will impact taxes collected? I would be interested to have a look at the treasury estimates but cant find anything on google (probably as I am searching for the wrong thing)




*Assuming ~£100B mortgage outstanding with higher rate BTL owners in London. ~£4B annual interest. therefore ~£800m additional tax.

The trend is clear, more tax needs to be paid by the greedy BTL brigade. More taxes to come, and lots of other ways to get them to pay more for the easy money they have had for far too long.

princeofpounds

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)

That's because not many commercial enterprises will use the sometimes insane levels of leverage that private BTL landlords often use.

On a project basis you may well get 70/30, but on a portfolio basis much less common; one good real estate crash and you are toast (check out the IERE share price for an example; not a residential REIT but some analogy)

CLAPTON

Gavin234 wrote: »

The trend is clear, more tax needs to be paid by the greedy BTL brigade. More taxes to come, and lots of other ways to get them to pay more for the easy money they have had for far too long.

tell me my friend

when VAT went up, did greedy retailers 'absorb' the tax rise or did they pass it on to the customer?

padington

CLAPTON wrote: »

tell me my friend

when VAT went up, did greedy retailers 'absorb' the tax rise or did they pass it on to the customer?

BTL landlords have new competition, there are 2 million spare rooms that have suddenly been incentivised to be used more.

I for one shall be renting mine out ( got a lodger this week ) and slashing my BTL offer. My lodger will be stopping paying £950 to his BTL landlord and start paying me the tax free amount. He's also a good friend that works nights at the Sunday times so I'll never see him but will be nice to catch up when we do.

It's going to be harder to raise rents me thinks. There is a point where the frog actually boils and dies.

Also if making attic conversions is suddenly a lot easier and cheaper for whatever reason, building more lodger space is suddenly a no brainier....

CLAPTON

padington wrote: »

BTL landlords have new competition, there are 2 million spare rooms that have suddenly been incentivised to be used more.

I for one shall be renting mine out ( got a lodger this week ) and slashing my BTL offer. My lodger will be stopping paying £950 to his BTL landlord and start paying me the tax free amount. He's also a good friend that works nights at the Sunday times so I'll never see him but will be nice to catch up when we do.

It's going to be harder to raise rents me thinks. There is a point where the frog actually boils and dies.

Also if making attic conversions is suddenly a lot easier and cheaper for whatever reason, building more lodger space is suddenly a no brainier....

maybe and maybe not

however the change to rent -a - room is independent of the other changes and

the observation that tax is not always absorbed by the retailers, is worthy of consideration.

chewmylegoff

padington wrote: »

BTL landlords have new competition, there are 2 million spare rooms that have suddenly been incentivised to be used more.

I for one shall be renting mine out ( got a lodger this week ) and slashing my BTL offer. My lodger will be stopping paying £950 to his BTL landlord and start paying me the tax free amount. He's also a good friend that works nights at the Sunday times so I'll never see him but will be nice to catch up when we do.

It's going to be harder to raise rents me thinks. There is a point where the frog actually boils and dies.

Also if making attic conversions is suddenly a lot easier and cheaper for whatever reason, building more lodger space is suddenly a no brainier....

All I know for definite is that these tax reforms will undoubtably make the price of 2 up 2 down terraces in "ally pally" increase even faster. I predict that the ally pally index will increase by 769,560% over the next year (revised upwards from my previous target of 764,312%). Even a meteorite destroying the world would only increase the rate of price appreciation.

padington

I doubt it will. I think we've just seen the top for a good while. Would love to be proved wrong though.

CLAPTON

padington wrote: »

I doubt it will. I think we've just seen the top for a good while. Would love to be proved wrong though.

have you sold, with a view to buying back, somewhat cheaper?

padington

CLAPTON wrote: »

maybe and maybe not

however the change to rent -a - room is independent of the other changes and

the observation that tax is not always absorbed by the retailers, is worthy of consideration.

I think the idea that costs often get passed on to the consumer is a really important point.

And In truth it will probably be somewhere in between, the renter will get more squeezed and the landlords will get more squeezed.

Whilst the simple homeowner will find life a relative walk in the park.