Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Ros ." at "26/07/2015 - 09:05":

What about just calling it the "Buy To Let Tax" everyone knows what a buy to let is and it's important that the public relate to it easily including our tenants. As Ross has mentioned several pages back we need to get the phrase mentioned as much as possible so that it is versed the same as the Bedroom Tax which caught on hugely.

Reply to the comment left by "Ian Simpson" at "22/07/2015 - 22:37":

Please could someone advise if it is possible to unsubscribe from receiving emails every time there's a new post ? As Ian mentioned, my inbox is also now totally swamped with emails. I will continue to actively read this thread, but just don't need the emails each time there is a new post.

Reply to the comment left by "Jim S" at "26/07/2015 - 13:19":

It's certainly clear. But buy to let is currently a dirty word - certainly in London. It would get about as much sympathy as a Bankers Tax.

Reply to the comment left by "Dr Monty Drawbridge " at "26/07/2015 - 12:50":

Hi Monty

An increase in the rate of interest will not increase your tax, it will reduce it. The amount of profit that HMRC will deem you to have made remains unchanged, because interest will not be part of that calculation. Therefore an increase in finance costs will not put you in a higher tax band.

But if your interest goes up, the 20% relief goes up in line with it (subject to restrictions, see below). The deemed profit is unchanged, the tax calculated on it is unchanged, but the relief is higher. So the amount of tax that you pay would be lower.

Of course, your real profit will be lower.

Note that the relief is given to the lower of a) finance costs, b) deemed rental profit, and c) total gross income minus the personal allowance. These factors are all taken into account in the spreadsheet.

If you want to see what the effect of a change to interest would be, just put it in its red box. The spreadsheet will give you the answer. You can do the same for changes to rent or other income.

Reply to the comment left by "Appalled Landlord" at "26/07/2015 - 13:32":

Indeed Appalled Landlord, I understand that. The *amount* of tax I pay will go down - but as a percentage of my actual profit it will go up, because it is not all offset against my profit.

Reply to the comment left by "John McKay" at "26/07/2015 - 12:21":

Hi John
I hadn't checked in the last few days so didn't know the e-petition facility was back up and running. I was also amazed no landlord body had started it yet and I have been bringing up the subject for the last 2 weeks, but didn't feel qualified to start it as just an individual. However, maybe we can try and agree on some wording now. I know we will never get 100% agreement, but let's try.
My first suggested wording - for people to now suggest changes/improvements to is:
'We, the undersigned completely oppose the decision in the Summer Budget to abolish landlords' right to include 100% of their costs in their tax return and to re-define this cost as 'income' to be taxed. No other businesses face this measure and it constitutes a discriminatory and illogical attack on the private rental sector. The economic and social repercussions are not yet known; however, it is likely to lead to house prices falling, landlords being made bankrupt and tenants being made homeless.'
Right - I know it's too long and it's not right - but I want others now to produce something better (i.e. not to tell me what is wrong with my wording, but to come up with better wording!)

Reply to the comment left by "Renovate To let" at "26/07/2015 - 08:33":

Great point Renovate to Let.

Reply to the comment left by "Ros ." at "26/07/2015 - 13:56":

Ros,

Reading these boards over the past couple of days, your energy is quite remarkable! You are doing an amazing job.

It is not the wording of your suggestion which I disagree with but the focus.

Even as a landlord, I don't strongly oppose the budget proposal going forward *on new debt* if it is true that the explosion of BTL is contributing to a problem - and I suspect that it could be. Even if it is not true - most people we need to get on side believe that it is.

What I do strongly oppose is the punitive and effectively retrospective nature of the rules and the way it affects people who have behaved diligently and planned long term life strategies. And the fact that because they are being applied iniquitously to private landlords only, they will be ineffective at achieving the declared aim of the tax: to level the playing field.

I think both the iniquitous and subsequently ineffectual nature of the application of this rule really is the key to gaining support.

1) It will mostly hurt the "small guys" and hand advantage to corporates;
2) BTL remains almost as viable as ever for corporate structure so will not do anything to redress the balance for occupier owners - which is supposed to be GO's main reason for its introduction. It will possibly just result in a transfer from the "small guys" to the "big guys".

I don't think we can underestimate the lack of support for landlords out there. We really need to think about how to win people over.

I think the story here is something more along the lines of: the small landlords are being shafted, whilst it's business as usual for the big landlords so the move is clearly not being made in the interests of either tenants or anyone wanting to buy a house.

The Tories are desperate to be seen as representative of the common person - the small guy. They are extremely vulnerable to accusations of favouring corporates and the rich. IMO this line of argument will attract much wider support than anything about the unfairness of treating buy to let businesses differently to other businesses.

Further to the point above, I was having a chat to a friend of mine last night and explaining the new rule rules. He has an enormous salary iro 500K (and just turned down a job on double that).

He was not put off investing in property - even in his own name. Whilst he'd rather it would not, he is not concerned if the investment makes a monthly loss. He is only interested in capital growth. His huge salary makes it easy to fund a small loss in a way other are unable to. It is making access to the capital gains available in the property market harder for the less well off. It is going to be the exclusive preserve of the rich.

Again, I think this type of argument is important to helping widen support. Tories helping the rich - what a surprise! (And yes, for all the good it would do in my safe labour constituency, I voted for them).

Reply to the comment left by "Ros ." at "26/07/2015 - 13:56":

Hi Ros, I had started an e-petition but was playing with words. I think what you wrote is a great start.

It would be good to hear from others who think there is specific wording that may add to it..

Is It better to come from a legitimate body or does it matter who starts it?

R