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ThomasAsh
Posts: 4 Newbie
Could someone tell me if I am working this out incorrectly regarding changes to how landlords will be taxed as of 2020 as I'm trying to understand how much of an impact these changes could have
Currently how the tax is applied (basic model)
Rent income £450
Mortgage cost £350
Profit £100
£100 is taxable at either 20/45% percent so amount paid would be £20/45?
2020
Rent income £450
Mortgage cost £350
Profit £100
All turnover is taxable so 20/45% of the £450 is £90/202.50? Eliminating nearly all profit or resulting in a loss.
Firstly have I got this wrong?
If so is this not just going to cause high rents? Or tenants trying to keep upand being evicted?
If this causes landlords to sell up then where will all these buyers emerge from?
There are tenants that live month to month that have to rent and will have great difficulty ever getting a deposit together so where would they go?
How do you see all this landing?
Currently how the tax is applied (basic model)
Rent income £450
Mortgage cost £350
Profit £100
£100 is taxable at either 20/45% percent so amount paid would be £20/45?
2020
Rent income £450
Mortgage cost £350
Profit £100
All turnover is taxable so 20/45% of the £450 is £90/202.50? Eliminating nearly all profit or resulting in a loss.
Firstly have I got this wrong?
If so is this not just going to cause high rents? Or tenants trying to keep upand being evicted?
If this causes landlords to sell up then where will all these buyers emerge from?
There are tenants that live month to month that have to rent and will have great difficulty ever getting a deposit together so where would they go?
How do you see all this landing?
0
Comments
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Interest can only be offset against income at a 20% rate. You'll only be affected if your income falls in the higher rate bands of 40% or 45%.0
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So when all the changes are implemented what will change if anything for a 20% taxpayer?
And what about higher rate taxpayers?0 -
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Your basic model is only correct if you have an interest only mortgage. If you have a repayment mortgage it's way off.0
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Crashy_Time wrote: »
The HPC morons appear to pinning their hopes of a crash because of section 24, unfortunately for them prices will have probably risen another 30% by 20200 -
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theartfullodger wrote: »Don't spend too much time on this: Big secret: The rules on taxing landlords will change, again, before 2020...
Don't tell anyone else mind...
Yes you have the Basel III clamp down on buy to let coming too, especially for those highly geared/debted.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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What's the basel clampdown??0
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This discussion has been closed.
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