2% increase in rental income tax. Will you be passing it on to your tenant??

RReeves

Ref the new 2% increase in tax on rental income. Assume this will just be passed onto the tenant via a rent increase??....Landlords, will you??

Dazed_and_C0nfused

RReeves said:

Ref the new 2% increase in tax on rental income. Assume this will just be passed onto the tenant via a rent increase??....Landlords, will you??

It's only 2% on the profit, not the income.

And the finance cost tax reducer will reflect the new basic rate for rental profits.  Which will help some people.

theartfullodger

RReeves said:

Ref the new 2% increase in tax on rental income. Assume this will just be passed onto the tenant via a rent increase??....Landlords, will you??

When interest rates dropped (see....
https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp

- did you reduce rents you were charging???? I didn't..

I had the privilege of paying a (for then) large mortgage under Thatcher's iron rule when (1979) it Bo|E| rates went from 10% to 17% in less than a year.  'twas "interesting"..

kinger101

Tax rates do not set the market rates for rents. 

mlz1413

Love the user name.... RReeves

Mr.Generous

kinger101 said:

Tax rates do not set the market rates for rents. 

Who mentioned Market rate? I have kept all rents well below market rate for existing tenants, 1 recently let is close to market rent, that one won't change. The others, yeah, the rents will go up by an extra 1% next year and the year after. I can't just keep taking a hit on personal income to subsidise tenants. I've got all sorts of extra costs from Renters Rights Bill - like Landlords registration fee andthe extra risk I am having to face with no section 21 remedy for a problem tenant, and the up coming EPC changes are looming.

BungalowBel

The problem with not increasing the rent is that it gradually falls more and more behind the market value, so if you ever want to charge the going rate it is a huge increase for the tenants.  It's better to keep it at or just below market rate and give a small  increase when necessary.

kinger101

Mr.Generous said:

kinger101 said:

Tax rates do not set the market rates for rents. 

Who mentioned Market rate? I have kept all rents well below market rate for existing tenants, 1 recently let is close to market rent, that one won't change. The others, yeah, the rents will go up by an extra 1% next year and the year after. I can't just keep taking a hit on personal income to subsidise tenants. I've got all sorts of extra costs from Renters Rights Bill - like Landlords registration fee andthe extra risk I am having to face with no section 21 remedy for a problem tenant, and the up coming EPC changes are looming.

I did and it was relevant to the OP's question on how much rent they should change.

Nobody is compelling you to let homes so if it doesn't work for you any more then sell up.

You're not the only person in the world to find your disposal income declining, or have to deal with changes in legislation.

If it is causing you that much if a headache, it probably isn't for you 

gazfocus

Dazed_and_C0nfused said:

RReeves said:

Ref the new 2% increase in tax on rental income. Assume this will just be passed onto the tenant via a rent increase??....Landlords, will you??

It's only 2% on the profit, not the income.

And the finance cost tax reducer will reflect the new basic rate for rental profits.  Which will help some people.

Technically incorrect as income tax on rental income doesn’t allow for deducting mortgage interest in the normal way you’d calculate profit. 

RReeves

To be honest I have had enough of being a landlord. Shame really as we have a great tenant, and the rent is well below what it should be, but I have decided it is time to get out. 

The only person that will suffer will be the tenant as they really want to live their until "end of days", but I guess that's what the government wants...will be serving notice shorty...  

martindow

RReeves said:

To be honest I have had enough of being a landlord. Shame really as we have a great tenant, and the rent is well below what it should be, but I have decided it is time to get out. 

The only person that will suffer will be the tenant as they really want to live their until "end of days", but I guess that's what the government wants...will be serving notice shorty...  

That is your choice, but you don't have to as you could sell it to another landlord with the tenant in situ.