BTL to be reviewed

IveSeenTheLight

Debt_Free_Chick wrote: »

Agreed ...... but making rent taxable isn't going to change anything, is it?

I wasn't answering Brit's post, but yours regarding whether the rent was subjected to income tax.

My post was to clarify that generally, only a small percentage will be subjected to income tax if any

Debt_Free_Chick

IveSeenTheLight wrote: »

I wasn't answering Brit's post, but yours regarding whether the rent was subjected to income tax.

My post was to clarify that generally, only a small percentage will be subjected to income tax if any

I know

Perhaps I was being too obtuse. Brit suggested that rent should be taxed. I was suggesting that it is already - albeit after deduction for allowable expenses.

So unless Brit meant changing the current rules in the way that rent is taxed .... which I then suggested might lead to changes in the rules for allowable deductions.

One thing's for sure. If this Government spot an opportunity to collect more tax, they'll do it

IveSeenTheLight

Thank Debt_Fre_Chick,
No need to explain Brits post as I uinderstood what she was saying.

It appeared you were unsure, confused and was questioning whether rent was subjected to income tax when you said: -

Debt_Free_Chick wrote: »

But the rent is already subject to income tax, isn't it

[/quote]

HugoSP

In any other business model whether it be manufacturing, holiday accomodation, services etc, interest paid on loans is a tax deductable. After all it is a legitimate business expense. The loan is taken out to finance capital in the same way as it is for any other business.

To remove this relief would:

Cause a lot of landlords to sell up
Put tenants out of their homes thereby creating an acute shortage of quality rental accomodation
Push rental prices up within the remaining rental stock, both before and after the mass exudous takes place, as LLs are fighting to cover the extra cost to make ends meet.

If the govt want to look at tax relief for LLs they should look no further than the 10% wear and tear allowance. This 10% deduction is a nice little earner for us and I would be heartbroken to lose it but, replacing it with a capital write down scheme similar to that allowable for other businesses would not seem too unfair.

Why should landlords be penalised?

Agreed, there are some who have shifted their own mortgages onto BTLs but

brit1234

HugoSP wrote: »

Why should landlords be penalised?

Mainly due to the huge damage it is doing to our society through social and economic problems. For example pricing out future home owners, property fraud, community fragmentation and huge national debt.

We need a smaller, less damaging sustainable landlord market.

IveSeenTheLight

brit1234 wrote: »

We need a smaller, less damaging sustainable landlord market.

Having a smaller LL market could also be an unsustainable and damaging situation.
Britain is actually different from the norm in Europe where for many countries there is a much higher rental population.

Renting is for some people a better choice for them and also a very worthwhile thing to do as your first home before you tie yourself into a mortgage.
Where better to learn the cost of running a home?

If there are less rental properties, this could drive rental rates much higher and make the option of renting unsustainable

subjecttocontract

brit1234 wrote: »

Mainly due to the huge damage it is doing to our society through social and economic problems. For example pricing out future home owners, property fraud, community fragmentation and huge national debt.

We need a smaller, less damaging sustainable landlord market.

Its debatable wether BTL is responsible for any of that.

There are lots of social & other changes that have increased the demand for rental property which the private rental market is able to meet.

* Many more singles
* More divorced/ separated
* More immigrants
* Less council housing stock available
* More job mobility/ contract workers
* Uncertainty in the housing market.....people holding back from buying
* Mortgage availability restricted
etc etc

BTL is a GOOD thing for many,

There are around 4 million private rented properties in the UK.......and there is still a massive shortgage of housing.

Lets hope this government doesn't screw it up further as they have with much of their dabbling in other areas.

barnaby-bear

IveSeenTheLight wrote: »

Having a smaller LL market could also be an unsustainable and damaging situation.
Britain is actually different from the norm in Europe where for many countries there is a much higher rental population.

Renting is for some people a better choice for them and also a very worthwhile thing to do as your first home before you tie yourself into a mortgage.
Where better to learn the cost of running a home?

If there are less rental properties, this could drive rental rates much higher and make the option of renting unsustainable

Fantastic let's follow Europe's model complete with their secure tenures too - where you have a legal right to stay years, capped rent rises and force repairs without the risk of the AST "not being renewed"....

rjm2k1

barnaby-bear wrote: »

Fantastic let's follow Europe's model complete with their secure tenures too - where you have a legal right to stay years, capped rent rises and force repairs without the risk of the AST "not being renewed"....

But those european countries tend to have a higher rental sector than private ownership, precisely the opposite of what the government is trying to achieve.


Yet again this government is meddling in something which isn't perfect but you can guarantee that it will be worse after the meddling than it was before. I assume that housing associations and other "professional" landlords will not be affected by these changes, only the small fish will have the tax "advantages" taken away from them.

Same as IT contractors have been singled out by the government time and time again, giving an advantage to the larger companies doing the same thing.

Same as HIPS being brought in to help house sales when noone really cares what heat efficiency their dream home has.

Same as Being unable to change a plug in my own home and being forced to be dependent on somebody else who may turn out to be a cowboy.

Same as being unable to change the windows in my home myself, without offering a large bung to the local council for a certificate.

Same as allowing work to be carried out on cars by 3rd party garages without voiding the warranty (the 3rd party garages proceeded to increase their prices to the same level as the main dealers).

The only thing this government has got right is the smoking ban and this from someone who used to be staunch labour!

Mrs_pbradley936

I put this on another thread about social housing but it seems relevant here too.

To get back to the subject of a social housing shortage, many people cannot afford to buy and renting is cheaper. I have an interest in the topic because I own property so I just did a simple calculation to illustrate the costs between buying and renting. I am using my own property as an example. It is a two bed flat approx 12 years old within easy commuting distance to London, it would cost around £140K to buy.

It currently rents for £675 a month. It would cost £902 per month to buy.

(100 per cent mortgage and 6% interest rate over 25 years)

In addition to the mortgage the buyer would have to pay the service charges of £80 per month. I pay those not the tenant.

I cannot see from these figures that private landlords are a problem