Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Appalled Landlord" at "17/08/2015 - 13:46":

I'm stealing that for Thursday 😉
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I don't know if anyone has noticed but Gary has kindly removed the Bee Lettings mention at the bottom of SNTG.

More on the housing 'crisis' of supply and FTBs.
http://emreact.com/go.asp?/bTEA001/mHDK92GN1/u1VM40GN1/xP8K02GN1

https://attendee.gotowebinar.com/register/3487183959386431233?inf_contact_key=f201e274a66c95319a8f6568199debfefb422456a8a8cf1f2f5767191b61366e

For Aran Curry's webinar tonight on the budget, should you be interested.

Reply to the comment left by "John McKay" at "17/08/2015 - 14:58":

That's was a very kind and shrewd gesture for the benefit of the campaign as a whole.

Hopefully uPad will hear about this as that was their reason for not promoting the SNTG website.
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Bit of feedback from my friend with the large commercial portfolio in a Ltd...
Hi Ian

Have signed petition as I believe genuine profit is all that should be taxable. Reading the article you sent there is much taken for granted and presumption in their argument which does their cause no credit and from what I have read from accountancy briefs on the budget I think they have overegged the anti-position. Nevertheless there is a genuine concern and I agree with the overall concept that interest should be a fully allowable relief.

Reply to the comment left by "Mark Alexander" at "17/08/2015 - 13:54":

And adding that in the Australian system it really is a tax break!

Richard Dyson at The Telegraph is going to be supporting our campaign and we will have a big article in this Saturday.

I've given him Connie's, Ros' and Ruhal's telephone numbers.

If any of you would like to have your picture taken and feature in The Telegraph this weekend as a case study please let me know and I will put you in touch with him.

Ideally he's looking for a landlord who will end up paying more tax than profit, or as close to that as possible if not. He's also looking for case studies where normal families (tenants) will have to be evicted due to a need for landlords to sell properties due to this tax change.
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I received a carbon copy of the letter from the RLA, via a local Cardiff property forum. which led to the following correspondence today:

Hi Douglas.
I have been helping to push the campaign against this on the website Property118. If you go to http://www.saynotogeorge.co.uk, you will see that the idea about the 40% to 20% change is a red herring. The change is from being able to offset 100% of finance costs (using the usual tax principle of profit = income - costs), to not being able to offset these costs.
In effect, these costs are added to taxable income and will make a vast number of landlords bankrupt. Perhaps you can take a look at the analyses on the website and also on Property118, whose founder, Mark Alexander, has also been invited up to the Treasury this week. We are not proposing alternatives as the whole principle of the change is wrong and will be devastating. Other alternatives won't make much difference at all in terms of ameliorating the effects.

I understand that you also know Julia Benham. I wrote a article for her last week which she has edited and put on her guest blogs. I think it sums things up quite nicely, so you may want to take a look. Here is the link: http://www.cardiffpropertyblog.com/category/guest-blog-posts

Then from him:

'Hi Ros,

Yes, we have already met the treasury and we have actually met George Osbourne directly. They are adamant that this approach is not going to change. This isn't stopping us from campaigning against it, but our many years of experience in lobbying government tells us that it is always worth presenting options to show that you are generally considering things, it helps them discuss openly as a black and white view just hits a brick wall.'

Then from me:

Hi Douglas.
Thanks for your quick reply. However, I find the sentence in the email you sent out is very misleading, that is, this one:

'From April 2017 Mortgage Interest Relief for residential landlords will be restricted to the basic rate of tax, meaning 20% instead of the current 40%.'

As I said, really the change is from 100% to 20% for all, with the even worse aspect being that interest payments now are re-defined as income to be taxed. In my own case, with my portfolio, if there were over the next however many years an increase in interest rates of 3%, I would have an actual joint income with my partner of £10,000, but according to the re-definition inherent in the tax change, it would be deemed to be a joint income of £190,000, and this would be taxed. For this reason I have to sell most of my portfolio in the next few years so that I get rid of all mortgage debt.
For some people, they will face this type of scenario without an increase in interest rates - for example, if they have a large portfolio, highly-geared, with a currently modest income and tied in at 5% or so. Their business model which has been viable for decades becomes obsolete, as does mine. The gravity of this is such that amendments and tweaking will get us nowhere.
Several portfolio landlords I know are now having to prepare to relocate abroad, as they will then be able to sell their portfolios without incurring CGT. I may also have to do this in the future, although I don't want to. I really hope suggestions about energy efficiency measures aren't brought up at the Treasury. How will they help landlords facing astronomical tax bills which increase (perversely) whenever their actual profit goes down (because of finance interest no longer being 100% deductible)?
And in the meantime, landlords doing exactly the same job, but with their properties legally registered within a limited company structure can carry on as before (i.e. because of a few pieces of paper which don't change the fact that they do exactly the same job as us).
I don't mean to be stroppy, but this is the situation, unfortunately. And it is important that landlords in your network understand how serious this is.
All the best.
Ros'

I am really worried the RLA is going to come up with this kind of irrelevant nonsense and I found the letter very disturbing.

Reply to the comment left by "Mark Alexander" at "17/08/2015 - 16:40":

Hi Mark, as you know I've already spoken with Richard. I thought I had someone for him that will be wiped out by this tax change but he has some personal stuff going on that is foremost in his mind at the moment, hence he will not volunteer as a case study.

Richard knows my own circumstances and may use some of my properties as smaller case studies. However I do think that some other people (as you have suggested) will have better stories to tell. If not then Richard has my number.