Rents soar to (another) record high

cells

mwpt wrote: »

No, they wouldn't.

If your business model relies entirely on leverage, you are going to get fscked somewhere along the timeline from now till the the future. If you manage to exit in a timely manner before that point, good for you.

Translation

If your business model relies entirely on leverage, I hope you are going to get fscked somewhere along the timeline from now till the the future. If you manage to exit in a timely manner before that point, it will boil my blood [STRIKE]good for you[/STRIKE].

chucknorris

mwpt wrote: »

No, they wouldn't.

If your business model relies entirely on leverage, you are going to get fscked somewhere along the timeline from now till the the future. If you manage to exit in a timely manner before that point, good for you.

There definitely seems to be a huge misunderstanding about this particular point, interest payments are (and have been for many years) legitimate business expenses, allowed against tax. I think (know) that he is referring to the obviously established fair tax treatment of allowing interest payments against tax. If a business is too highly leveraged and consequently incurs a punitive interest payment, that is obviously down to bad business planning, however it is stretching it a bit for businesses to assume that they may be singled out and disallowed to claim genuine expenses against tax. On reflection I was probably slightly harsh on buglawton earlier.

This isn't sour grapes, In my opinion I have done well over the years, so I can take this, others are not so well placed.

buglawton

As I pointed out in #328, there's evidence that businesses and foreign investors are also competing in the BTL market. Nothing wrong in principle if it meant that the results of their investment was to create supply and satisfy growing demand. But the govt needs to be careful that in order to create a good headline, they are not putting 'mom and pop' investors out in the cold compared to well organised companies/bigwigs/oligarchs who can employ tax lawyers as well as repatriate profits abroad.

I think that small UK based BTL investors are more likely to keep their occupancy rates high (unfair tax treatment on interest costs or not). And by the way, they vote at elections.

westernpromise

CLAPTON wrote: »

the ownership of the vast majority of UK property is in the public domain (including yours and mine)
there is no reason all property should not be so listed.

It is. Sometimes the owner is a company. What's wrong with that and why is the tax evading Guardian entitled to know more?

mwpt

chucknorris wrote: »

There definitely seems to be a huge misunderstanding about this particular point, interest payments are (and have been for many years) legitimate business expenses, allowed against tax. I think (know) that he is referring to the obviously established fair tax treatment of allowing interest payments against tax. If a business is too highly leveraged and consequently incurs a punitive interest payment, that is obviously down to bad business planning, however it is stretching it a bit for businesses to assume that they may be singled out and disallowed to claim genuine expenses against tax. On reflection I was probably slightly harsh on buglawton earlier.

Not so. The law is the law, made for the common good. Perhaps you disagree with it but there are exceptions and special punitive measures for a lot of things. Why do tobacco companies pay something like 86% (quick google) tax rate on their products?

George Osborne has stated that BTL are having an adverse impact on FTBers and he is taking measures to curb this, immediately through extra 3% SDLT, then through loss of tax relief and still upcoming is the risk weights stuff on leveraged BTL (of which I know not much).

I'm just pointing out the obvious. If someone gambles using high leverage for a long period of time, the likelihood they will come unstuck is high. You have not followed that model and haven't continued to expand your portfolio at high leverage, so you'll be safe.

To those that aren't, no use complaining, you took the risk, no-one held a gun to your head.

wotsthat

What does highly or over leveraged actually mean?

Does it depend on the beholder?

cells

mwpt wrote: »

Not so. The law is the law, made for the common good. Perhaps you disagree with it but there are exceptions and special punitive measures for a lot of things. Why do tobacco companies pay something like 86% (quick google) tax rate on their products?

The law is there to also protect the few from the many, we dont go pillaging billionaire and millionaires for the common good nor do we go about seizing property for the common good. its been tried a few times elsewhere and not found to be in the common good long term

George Osborne has stated that BTL are having an adverse impact on FTBers and he is taking measures to curb this, immediately through extra 3% SDLT, then through loss of tax relief and still upcoming is the risk weights stuff on leveraged BTL (of which I know not much).

Just saying something does not make it true.
Landlords are not competing for properties in at least half the country where property stays on the market for months and prices are low. The other half is debatable too. Overall you are looking through London glasses and think its the same everywhere which it isnt

I'm just pointing out the obvious. If someone gambles using high leverage for a long period of time, the likelihood they will come unstuck is high. You have not followed that model and haven't continued to expand your portfolio at high leverage, so you'll be safe.

This is great, define over leveraged or high leveraged.

Lets hope that long term the BTL sector moves to corporation paying 18% instead of me paying 45% hopefully George can send you the bill for the missing 27%

To those that aren't, no use complaining, you took the risk, no-one held a gun to your head.

You talk as if prices have crashed and people are crying. They certainly have not in London. people are somewhat annoyed that a legitimate expense was artificially defined as a tax-rebate for landlords but only human landlords and only if you are a landlord of one type of property. See how silly it is? If you get planning permission for a building to be offices its one rules if its housing its different rules even though its the same activity and the same bricks.


personally I think the +3% stamp duty is justified (maybe exempt for new builds) and at the perfect level. It should go no higher and it should have been in place a lot sooner. The funds should also have been used to reduce stamp duty on FTB to zero for those below £250k. The interest rate thing chaining from a cost to a taxrebate is just silly and should not have happened and should be dropped.

cells

wotsthat wrote: »

What does highly or over leveraged actually mean?

Does it depend on the beholder?

its just propaganda. what the house price crew really mean is anyone buying a house beyond their main residence with any means whatsoever is the spawn of the devil.

Of course saying that wont get you a lot of support so the next one is to say, those who buy with a mortgage a second home are the devils spawn....that too wont get you any support

So it morphs into....over-leveraged property speculators.... that works as 'speculator' is evil so over speculator must be like the big boss of evil

mwpt

wotsthat wrote: »

What does highly or over leveraged actually mean?

Does it depend on the beholder?

No, it depends on if you go under when things change or not. If so, you were too leveraged. HTH.

mwpt

cells wrote: »

its just propaganda. what the house price crew really mean is anyone buying a house beyond their main residence with any means whatsoever is the spawn of the devil.

Of course saying that wont get you a lot of support so the next one is to say, those who buy with a mortgage a second home are the devils spawn....that too wont get you any support

So it morphs into....over-leveraged property speculators.... that works as 'speculator' is evil so over speculator must be like the big boss of evil

No, it works like this. Speculators in highly leveraged property portfolios are crying and using operation human shield (see the crowdsourcing campaign over at 118) to try and influence the change of law. I'm just pointing out that people like buglawton crying that he was just trying to "shape his own future" (come on, am I the only one who sees how absurd this statement is, hint, we all try to shape our own future) are not victims. They are leveraged speculators and they must take responsibility for their decisions. Blaming everyone else for your decision to accrue a portfolio of homes using high leverage while FTBers can't afford one, well... absolutely no sympathy here. Start a real business simpletons.