Treatment of BTL in the budget?

caronoel

There is a real risk that the proposed punitive taxes on property investors will just end up being passed on to tenants in the form of higher rents, as happened when a booming Ireland tried this experiment almost twenty years ago.

Indeed the only ones likely to benefit from this are those landlords who dont declare their rental income, and pocket the higher rents.

A nonsense tax that is not in the tenants interest, and needs to be cast aside.

mwpt

caronoel wrote: »

There is a real risk that the proposed punitive taxes on property investors will just end up being passed on to tenants in the form of higher rents, as happened when a booming Ireland tried this experiment almost twenty years ago.

I thought this was inconclusive?

Indeed the only ones likely to benefit from this are those landlords who dont declare their rental income, and pocket the higher rents.

A nonsense tax that is not in the tenants interest, and needs to be cast aside.

What if the tax had always been there since the inception of leveraged buy to let?

EDIT: I fell for it, I called it a tax. It isn't a tax, it is a reduction of tax relief.

purch

Stick 'em against a wall and shoot them :eek:

Jane_gs

caronoel wrote: »

There is a real risk that the proposed punitive taxes on property investors will just end up being passed on to tenants in the form of higher rents, .

What specific taxes are you on about ?

chewmylegoff

purch wrote: »

Stick 'em against a wall and shoot them :eek:

The landlords or the tenants? My preference would be both, it would free up a lot of housing.

Andy_L

purch wrote: »

Stick 'em against a wall and shoot them :eek:

Who you gonna rent the wall off?

kinger101

chewmylegoff wrote: »

The landlords or the tenants? My preference would be both, it would free up a lot of housing.

Start with the letting agents first.

littlegreenfrog_2

It's not a tax, it's a reduction in tax relief. BTL is still a gravy train, just not quite as good as it was before. In my view we need punitive taxes on property which is not occupied full-time. London is full of empty flats which are just bank vaults for rich foreign investors. Places like Cornwall are full of holiday homes which have priced locals out of the market. In my view, these people are fair game. BTL is more complicated. It needs to be more heavily regulated and less profitable, but killing it off altogether would cause a lot of problems.

chucknorris

littlegreenfrog wrote: »

IBTL is more complicated. It needs to be more heavily regulated and less profitable, but killing it off altogether would cause a lot of problems.

I don't think that there is anything wrong with current regulations, they just need to be fully implemented, and not allow landlords to get away with non compliance, come down hard on them if they do.

It has been made less profitable already:
-Loss of the wear and tear allowance
-Higher stamp duty
-Partial loss of tax relief

When the base rate eventually goes above 2.5%, I am better off selling my properties and re-investing the equity in shares (which is what I intend to do), and that is with having to pay significant CGT. So even though the equity is reduced by CGT, it would still produce about the same net income, but with much less effort and lifestyle compromise (so far my tracker funds have never expected me to show them around a property or organise a property repair). If I was looking at new investments I certainly wouldn't consider property, I would (and have been for the last 8 years, although initially that was more for portfolio diversification) invest in shares.

I concede that everyone is not as bearish as me regarding property, there are some on here who still think that it will be lucrative. But bear in mind I am perceived on here as a property bull (although I certainly don't see myself as that).

Bluebirdman_of_Alcathays

chucknorris wrote: »

I don't think that there is anything wrong with current regulations, they just need to be fully implemented, and not allow landlords to get away with non compliance, come down hard on them if they do.

It has been made less profitable already:
-Loss of the wear and tear allowance
-Higher stamp duty
-Partial loss of tax relief

When the base rate eventually goes above 2.5%, I am better off selling my properties and re-investing the equity in shares (which is what I intend to do), and that is with having to pay significant CGT. So even though the equity is reduced by CGT, it would still produce about the same net income, but with much less effort and lifestyle compromise (so far my tracker funds have never expected me to show them around a property or organise a property repair). If I was looking at new investments I certainly wouldn't consider property, I would (and have been for the last 8 years, although initially that was more for portfolio diversification) invest in shares.

I concede that everyone is not as bearish as me regarding property, there are some on here who still think that it will be lucrative. But bear in mind I am perceived on here as a property bull (although I certainly don't see myself as that).

You clearly have done your sums, and know what you're doing. More than half of the LLs I know in the non internet world haven't, and don't, and will be hit very hard.


They probably all vote Tory as well - it's a funny old world!

westernpromise

littlegreenfrog wrote: »

In my view we need punitive taxes on property which is not occupied full-time.

The state is not entitled to an opinion on how I use my property, any more than it is entitled to hold an opinion on what I do in my bedroom or on what time I choose to eat breakfast.

Places like Cornwall are full of holiday homes which have priced locals out of the market. In my view, these people are fair game.

Places like St. John's Wood, Belsize Park and Hampstead are also full of homes that locals can't afford to buy. What's so special about Cornwall?

BTL is more complicated. It needs to be more heavily regulated and less profitable, but killing it off altogether would cause a lot of problems.

You seem quite keen on the state intervening in people's affairs, so here's a suggestion for you in similar vein. To alleviate the housing shortage, how about if the state decreed that all rental properties must be occupied by no fewer than 1.5 people per room excluding those less than 6 feet wide.

So a rented 3 bedroom house with a sitting room must by law be occupied by at least 6 people. A five-bedroom house with two receptions would be required to house 11 people.

For every month where the property is underoccupied, a fine of 3x the rent plus VAT would be levied on the other tenants. This ensures that if the tenants don't get along, there is a financial penalty for being so obnoxious to each other that someone feels forced to leave; the others will be fined a multiple of the rent until the house is legally re-occupied.

This will prevent small numbers of greedy, selfish, horrible anti-social tenants hogging properties that could easily house far more people. It will also reduce the demand for rental properties because tenants will be made to fit into fewer houses. Rich tenants will just pay the fine and treat it as a premium worth paying for the luxury of reduced occupation density. The higher rents they pay will be taxed as landlord's profits so the Exchequer gains.

It's fun thinking up arbitrary state penalties and taxes to be imposed on everyone except myself.