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

Markmywords

jamesreid said:

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

I understand what you are saying. I think you need to tell  your MP or the housing minister of these problems. If I am not mistaken, private landlords are treated as business. However, they cannot offset the mortgage interest as an expense which is the only business that is penalised in such a way. Unless they change this the tenant is not going to care the costs and pressures that landlords may face including increasing mortgage costs. 

Markmywords

The punitive legislation and costs are making private landlords sell up and leave the market as it is not worth the headache. Only the  government can make it better and fairer. 

Grumpy_chap

EnPointe said:

   wanting to nationalise the losses while privatising the profits, 

In what way are the losses nationalised?

If, indeed, there are any losses?

EnPointe said:

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 

There is no myth that we were sold

Markmywords said:

The punitive legislation and costs are making private landlords sell up and leave the market as it is not worth the headache. Only the  government can make it better and fairer.

What punitive legislation?
Being a LL remains viable.  Nothing is unfair.

poseidon1

Grumpy_chap said:

EnPointe said:

   wanting to nationalise the losses while privatising the profits, 

In what way are the losses nationalised?

If, indeed, there are any losses?

EnPointe said:

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 

There is no myth that we were sold

Markmywords said:

The punitive legislation and costs are making private landlords sell up and leave the market as it is not worth the headache. Only the  government can make it better and fairer.

What punitive legislation?
Being a LL remains viable.  Nothing is unfair.

I am in no way sympathetic Jamesreed's plight, but evidently you are unaware of Section 24  Finance Act 2015 and the restriction of mortgage interest expense to just 20% of the interest paid by higher rate tax paying landlords.

 Prior to 2016 all landlords irrespective of tax status received full mortgage interest  relief against residential  rental income irrespective of their marginal rate of tax. For many higher rate  ( highly leveraged) landlords this has lead to many now being taxed on non exsistent rental profits, a situation no other business activity in the UK suffers from.  Significantly Section 24 did not extend to commercial property landlords

However, it has to be said the avowed political intent of the Section was to discourage growth of the amateur  residential landlord sector, so in this regard the legislation pernicious as it might appear , is meeting its objective.

Grumpy_chap

poseidon1 said:

evidently you are unaware of Section 24  Finance Act 2015 and the restriction of mortgage interest expense to just 20% of the interest paid by higher rate tax paying landlords.

As a LL, I am fully aware.
I still don't find anything punitive.  Or unfair.
Nor do I recognise any myth that we were sold.
Nor do I recognise nationalised losses but privatised profits 

DBdoobydoo

poseidon1 said:

Grumpy_chap said:

EnPointe said:

   wanting to nationalise the losses while privatising the profits, 

In what way are the losses nationalised?

If, indeed, there are any losses?

EnPointe said:

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 

There is no myth that we were sold

Markmywords said:

The punitive legislation and costs are making private landlords sell up and leave the market as it is not worth the headache. Only the  government can make it better and fairer.

What punitive legislation?
Being a LL remains viable.  Nothing is unfair.

I am in no way sympathetic Jamesreed's plight, but evidently you are unaware of Section 24  Finance Act 2015 and the restriction of mortgage interest expense to just 20% of the interest paid by higher rate tax paying landlords.

 Prior to 2016 all landlords irrespective of tax status received full mortgage interest  relief against residential  rental income irrespective of their marginal rate of tax. For many higher rate  ( highly leveraged) landlords this has lead to many now being taxed on non exsistent rental profits, a situation no other business activity in the UK suffers from.  Significantly Section 24 did not extend to commercial property landlords

However, it has to be said the avowed political intent of the Section was to discourage growth of the amateur  residential landlord sector, so in this regard the legislation pernicious as it might appear , is meeting its objective.

Perhaps if running a business you should set up as a proper business & not hope to continue to exploit a tax loophole as a private individual? Either accept you don't get to offset your higher rate personal tax with business costs or set up as a Ltd & offset full interest paid on mortgage.

Nomunnofun1

Grumpy_chap said:

poseidon1 said:

evidently you are unaware of Section 24  Finance Act 2015 and the restriction of mortgage interest expense to just 20% of the interest paid by higher rate tax paying landlords.

As a LL, I am fully aware.
I still don't find anything punitive.  Or unfair.
Nor do I recognise any myth that we were sold.
Nor do I recognise nationalised losses but privatised profits 

Agreed - why should landlords obtain 40% relief on mortgage interest? I have a similar outlook on pension contributions but that’s somewhat off topic. 

eskbanker

jamesreid said:

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.

But you were trying to argue that your costs (on an existing property) had risen by 40% over three years due to new taxes and regulations, so a small recent tweak to stamp duty obviously can't explain that?

poseidon1

Nomunnofun1 said:

Grumpy_chap said:

poseidon1 said:

evidently you are unaware of Section 24  Finance Act 2015 and the restriction of mortgage interest expense to just 20% of the interest paid by higher rate tax paying landlords.

As a LL, I am fully aware.
I still don't find anything punitive.  Or unfair.
Nor do I recognise any myth that we were sold.
Nor do I recognise nationalised losses but privatised profits 

Agreed - why should landlords obtain 40% relief on mortgage interest? I have a similar outlook on pension contributions but that’s somewhat off topic. 

I am a commercial property landlord with far fewer obligations in operating the arrangement  compared to residential property landlords ( my tenant is 100% responsible for costs of maintaineance upkeep and insurance of the building on the 10 year lease) .

If I were to choose to borrow substantially against the property, the entire interest outgoing is tax deductible all the way up to 45% if my income were to reach that level.

 I am not a residential property landlord ( and would not want to be!), but struggle to see the  justification in distinguishing between the two 'businesses' from the point of view of tax deductibility of loan interest. Seems to me one landlord is deemed ( as a matter of public policy ) to be parasitical and the other not.

DBdoobydoo

poseidon1 said:

Nomunnofun1 said:

Grumpy_chap said:

poseidon1 said:

evidently you are unaware of Section 24  Finance Act 2015 and the restriction of mortgage interest expense to just 20% of the interest paid by higher rate tax paying landlords.

As a LL, I am fully aware.
I still don't find anything punitive.  Or unfair.
Nor do I recognise any myth that we were sold.
Nor do I recognise nationalised losses but privatised profits 

Agreed - why should landlords obtain 40% relief on mortgage interest? I have a similar outlook on pension contributions but that’s somewhat off topic. 

I am a commercial property landlord with far fewer obligations in operating the arrangement  compared to residential property landlords ( my tenant is 100% responsible for costs of maintaineance upkeep and insurance of the building on the 10 year lease) .

If I were to choose to borrow substantially against the property, the entire interest outgoing is tax deductible all the way up to 45% if my income were to reach that level.

 I am not a residential property landlord ( and would not want to be!), but struggle to see the  justification in distinguishing between the two 'businesses' from the point of view of tax deductibility of loan interest. Seems to me one landlord is deemed ( as a matter of public policy ) to be parasitical and the other not.

BTL seriously distorted the residential property market forcing up house prices by allowing the Amateur Property Magnate to offset interest at marginal tax rates. Preventing the AMPs from exploiting the loophole of offsetting the HRT they are paying on their salary against the interest rates on the BTL is a necessary corrective. It's still possible for mortgage interest on BTLs to be fully offset against income from the BTLs with the correct business structure but of course this doesn't provide the one way bet that government subsidised loan repayments with capital appreciation formerly available.