Are the Torys real Torys?

danothy

wotsthat wrote: »

Consumer spending? Ugh!

Disposable income? Bleargh!

Thrugelmir

lawriejones1 wrote: »

Let's look at the attractive tax breaks offered to those investing in BTL that Osbourne has begun to crack down on. That's a start.

What are you on about? Attractive tax breaks? Interest has been a tax deductible business expense for all the years I've been working in finance. ( and that's a very long time). So at least start with something credible and factual.

In both of these ways the Governments failure to do anything must be read as tacit approval for the BTL market.

The Government is doing something. Isn't that why BTL'ers are running around screaming like kids? Wasting hours of peoples valuable time because they don't like the changes.

kinger101

lawriejones1 wrote: »

Let's look at the attractive tax breaks offered to those investing in BTL that Osbourne has begun to crack down on. That's a start.

The Government is also aware of the housing crisis that this board is full of - huge speculation on the housing market is pricing many people out of the opportunity to buy a home.

In both of these ways the Governments failure to do anything must be read as tacit approval for the BTL market.

Actually, no specific tax breaks were "offered" to landlords. Interest on debt is an allowable expense whether you're letting a property or manufacturing widgits.

Osborne is making BTL less attractive, but is in effect shifting the government's historic indifference on this. Of course, he now gets to claim he took action which no previous Labour government did.

westernpromise

kinger101 wrote: »

Actually, no specific tax breaks were "offered" to landlords. Interest on debt is an allowable expense whether you're renting a property or manufacturing widgits.

Osborne is making BTL less attractive, but is in effect shifting the government's historic indifference on this. Of course, he now gets to claim he took action which no previous Labour government did.

The problem he's creating - presumably for his successor - is that he's reducing the rental supply at the same time as things like MMR reduce displaced tenants' ability to buy instead. So if you can't rent and you can't buy that means the state will have to go back into the housing business, but extending RTB to HA properties means that he also has to replace those.

This won't end well.

Thrugelmir

westernpromise wrote: »

The problem he's creating - presumably for his successor - is that he's reducing the rental supply at the same time as things like MMR reduce displaced tenants' ability to buy instead. So if you can't rent and you can't buy that means the state will have to go back into the housing business, but extending RTB to HA properties means that he also has to replace those.

This won't end well.

MMR was in response to the poor lending of the credit boom years. Without BTL there'll still be a healthy rental market. BTL didn't even exist until 1998. So little point in blowing trumpets. The rules are being changed and the genie put back in the box. That's all.

Jason74

lawriejones1 wrote: »

My view on BTL is that as a business it doesn't create or produce anything, but it's a business Governments have been happy to see people start up and invest in. But this isn't about BTL - take that out of the equation and we're still left with a Tory party that's gutting business and the normal guy with higher taxes.

The thing is, if you take out BTL, I don't think the idea that the Tory party is "gutting business and the normal guy with higher taxes" is really true. From reducing top rate tax, to IHT changes, increasing the personal allowances and changes to corporation tax, the Government is making good on its promise to move towards a regime where people keep more of their earnings / wealth. I actually think there's a legitimate question as to whether some of those actions are sensible given the deficit, but I think its pretty clear that that's the direction of travel.

So for me, the biggest area where your statement is true is BTL (which was indeed the thrust of your OP). And I think that there are very good reasons for this. I think more people are coming to understand the problems that go with too many people being relatively insecurely housed in the private sector. But there's also a much more overtly political point here too. Even if we increase building, the stock of homes is still limited. The government wants to increase homeownership, but the more of the finite stock is BTL, the less homeowners there are.

Making BTL less attractive means more homeowners, as well as having a dampening effect on HPI and bringing in extra tax revenue. It's also a political positive, as quite a few swing voters will gravitate to the blue corner as a result of the policy, while those who dislike it will almost certainly reluctantly vote Tory anyway. After all, where else are they going to go?.

So a "targeted attack" on BTL has social, economic, and (for a Tory Chancellor at least) political benefits. Given that reality, it's no surprise that we're seeing just that from a highly political Chancellor, and I don't think the fact that he's doing just that indicates any kind of wider anti small business approach.

antrobus

lawriejones1 wrote: »

As a child, I was brought up to consider the conservatives to be about lower taxes, investing in business and about helping people to become entrepreneurial and take chances...

That's a pretty decent definition of Gladstonian liberalism.

Whether such notions are intrinsic to those that profess to be Tories, or indeed Conservatives (they are not necessarily the same thing) would be another question.

BananaRepublic

BTL is not a small business that creates wealth in the way a services or software company does. It's an investment. I fail to see why an investment attracts mortgage interest relief, it is grossly unfair, helping to push up house prices significantly, and out of the reach of the lower paid. It's a perk for the wealthy middle classes, and creates a two tier society. I'd argue that the lost tax to the government is very damaging, simply because there is less revenue for services etc. Some of these people can almost avoid tax.

Conservatism should be about standing on your own two feet, but not unfairness. Selling off council houses benefited the lower paid. Osborne is an excellent chancellor in my view.

kinger101

BananaRepublic wrote: »

BTL is not a small business that creates wealth in the way a services or software company does. It's an investment. I fail to see why an investment attracts mortgage interest relief, it is grossly unfair, helping to push up house prices significantly, and out of the reach of the lower paid. It's a perk for the wealthy middle classes, and creates a two tier society. I'd argue that the lost tax to the government is very damaging, simply because there is less revenue for services etc. Some of these people can almost avoid tax.

Conservatism should be about standing on your own two feet, but not unfairness. Selling off council houses benefited the lower paid. Osborne is an excellent chancellor in my view.

The tax code disagrees with you. Letting residential property is a business, but not a trade. There are many holding companies whose sole activity is holding investments which are also classified as businesses.

But let's think about the interest deduction another way. What about Enterprise Rent-A-Car. If they borrow money from the bank to purchase vehicles, the interest element is a deductible expense. But you don't get car owners complaining that Enterprise are getting a subsidy. And do you also complain restaurants are getting a discount on food just because they have debt on their balance sheet?

Your assertion that letting properties does not create wealth is also incorrect. The bank will provide a mortgage. The landlord may use a letting agent. Who will use the services of credit reference agencies. The landlord will also need to repair and maintain the property.

If everyone who needed to rent a home had one provided by the council, can you tell me how much income tax, stamp duty and capital gains tax that would generate?

And selling off council houses didn't benefit the lower paid. It benefited people who were lucky enough to be born at the right time.

Thrugelmir

kinger101 wrote: »

Your assertion that letting properties does not create wealth is also incorrect. The bank will provide a mortgage. The landlord may use a letting agent. Who will use the services of credit reference agencies. The landlord will also need to repair and maintain the property.

And who owns the debt ( i.e. where does the interest go) ?

That's the real issue.