A different way to advertise rental prices - "Cost plus taxes"?

jamesreid

Hi,
(Writing as a landlord)
I've noticed for some time how we regularly have new taxes and regulations imposed (by both political persuasions) on "the evil landlords", and somewhat independently stories about "rents are increasing out of control" - with no connection between the two.
I'm very conscious that while the rent on my own rental property has gone up around 40% in the last 3 years, that I'm not making more money per year that three years ago.
I'm wondering if there is interest in marketing properties as "£xxx per month, including £xxx of tax and compliance costs" - ie make tenants more cognisant of the significant amount of their rent that is really just a tax on renting disguised as a landlord tax
Thanks
James.

FlorayG

No. They are not interested in your costs; if they were, they would research that themselves

eskbanker

jamesreid said:

I've noticed for some time how we regularly have new taxes and regulations imposed (by both political persuasions) on "the evil landlords", and somewhat independently stories about "rents are increasing out of control" - with no connection between the two.

I'm very conscious that while the rent on my own rental property has gone up around 40% in the last 3 years, that I'm not making more money per year that three years ago.
I'm wondering if there is interest in marketing properties as "£xxx per month, including £xxx of tax and compliance costs" - ie make tenants more cognisant of the significant amount of their rent that is really just a tax on renting disguised as a landlord tax

Which recent significant tax changes are you thinking of?  Obviously the rental revenue is subject to income tax, but that's always been like that, and likewise CGT on gains and so on - there's been some tinkering with stamp duty but that's a one-off when acquiring a property, so it isn't clear what exactly you're referring to?

jamesreid

eskbanker said:

jamesreid said:

I've noticed for some time how we regularly have new taxes and regulations imposed (by both political persuasions) on "the evil landlords", and somewhat independently stories about "rents are increasing out of control" - with no connection between the two.

I'm very conscious that while the rent on my own rental property has gone up around 40% in the last 3 years, that I'm not making more money per year that three years ago.
I'm wondering if there is interest in marketing properties as "£xxx per month, including £xxx of tax and compliance costs" - ie make tenants more cognisant of the significant amount of their rent that is really just a tax on renting disguised as a landlord tax

Which recent significant tax changes are you thinking of?  Obviously the rental revenue is subject to income tax, but that's always been like that, and likewise CGT on gains and so on - there's been some tinkering with stamp duty but that's a one-off when acquiring a property, so it isn't clear what exactly you're referring to?

Latest one is stamp duty increase... sure, it's a one off cost, but it will just work it's way back in to the rent.

jamesreid

flaneurs_lobster said:

Your prospective tenants really couldn't give a toss, they are far more interested in whether the fridge works rather than your poor landlord sob story.

The point I'm trying to make is to make tenants more aware of just how much of their rent goes towards compliance and tax.  I'd like to think that if they were more aware of how much they are paying is not going to the landlord, but rather the government or compliance costs then they might take more notice of what they are paying for.  Particularly on the compliance side, I suspect if tenants were given a choice on whether to have a high level of compliance costs or lower rent, I suspect many would choose to have less compliance

born_again

I would guess most would be more interested in how much profit a year you make than your actual costs.

Grumpy_chap

jamesreid said:

Hi,
(Writing as a landlord)
I've noticed for some time how we regularly have new taxes and regulations imposed (by both political persuasions) on "the evil landlords", and somewhat independently stories about "rents are increasing out of control" - with no connection between the two.
I'm very conscious that while the rent on my own rental property has gone up around 40% in the last 3 years, that I'm not making more money per year that three years ago.
I'm wondering if there is interest in marketing properties as "£xxx per month, including £xxx of tax and compliance costs" - ie make tenants more cognisant of the significant amount of their rent that is really just a tax on renting disguised as a landlord tax
Thanks
James.

I just don't see how that could possibly work.

Say an individual buys a new property to let out. 

That purchase incurs a substantial Stamp Duty at purchase, so in the first rental period (until that Stamp Duty is recovered), the rent would have to be "free + taxes".

Then there would be a long period when the tax involved is Income Tax, so the rent would need to be advertised at a different rate plus taxes.  There would be differences between some LLs showing "rent + zero taxes" (like my non-working wife) right through to where other LLs land in the £100k - £125k band personal allowance withdrawal so would show "very low rent + very high taxes".  Would a portfolio LL show the first property at "zero taxes", then so at "20% income tax" then some at "40% income tax" and so on?  Or, would the taxes be aggregated?  Plus some LLs operate as Ltd Co, so the tax rates are all different again.

Then, the LL decides to sell, but CGT can never be shown in the "rent plus taxes" as CGT is not incurred until after the rental income has ceased.  And Ltd Co LLs would not ever show CGT but would incur Corporation Tax when the property is sold, unless accounting for balance book adjustments as time progresses.

All too complicated to be shown in a simple manner.
Wholly different to buying a TV, where there is a clear "point of sale" tax (VAT).

kinger101

It would make me rent somewhere else. Aside from the lack of professionalism,  I don't want the landlord's sob stories. They can air their grievance with the UK tax system with like-minded people instead.

The fact is most landlord's are in a relatively fortunate position of having a large asset from which they can either let our or sell and reinvest into something more straightforward.  

Do you take an interest in the tenant's tax affairs? Or anyone else you transact with?

molerat

Do you care how much tax and compliance costs there is on your tin of beans from Tesco ?  No, I didn't think so.  All a tenant is interested in is how much more or less their rent is compared to the house down the street.  If you start adding your individualised costs to the rent you will soon price yourself out of the market.

EnPointe

jamesreid said:

Hi,
(Writing as a landlord)
I've noticed for some time how we regularly have new taxes and regulations imposed (by both political persuasions) on "the evil landlords", and somewhat independently stories about "rents are increasing out of control" - with no connection between the two.
I'm very conscious that while the rent on my own rental property has gone up around 40% in the last 3 years, that I'm not making more money per year that three years ago.
I'm wondering if there is interest in marketing properties as "£xxx per month, including £xxx of tax and compliance costs" - ie make tenants more cognisant of the significant amount of their rent that is really just a tax on renting disguised as a landlord tax
Thanks
James.

 the ordinary person in the street  is not interested in  trying to  make you  feel better about your hoarding  of properties and wanting to nationalise the losses while privatising the profits, 

this  is about as far as we can go here  without falling foul of the political debate rules 

EnPointe

born_again said:

I would guess most would be more interested in how much profit a year you make than your actual costs.

as well as the capital appreciation 

 this isthe problem with the amateur property tycoons they were sold the myth of  passive income  plus appreciating asset  and are notw upset  that despite  having an appreciating  asset they  either have costs or have to do some actual work