Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Appalled Landlord" at "19/08/2015 - 23:05":

A L

The task force was all about helping the big boys:

https://www.gov.uk/government/speeches/private-rented-sector

Well, am on hols for a week (although dealing with leaks, neighbour OOs from hell and all the usual stuff in tenanted properties back at home as always on every holiday ever been on) and have to admit have had a few shandies today, so apologies in advance if any of following is gibberish. I have an appointment with my MP (David Gauke, Financial Secretary to the Treasury) now confirmed. Not keen to specify date for a number of reasons, such as don't want to be a target for the many Neanderthal yet very devious & passionate 'haters' amongst this forums external voyeurs (you know who you are... eg @HPC).

Anyone with half a brain cell realises that the budget proposal with respect to non-incorporated BTL businesses appeared to be illogical and 'unfair' (boohoo) and may serve little actual purpose but mainly to increase rents, which the TPTB had probably already envisaged.... but as the govt unlikely to care about individuals and as it might be a little hard for some to navigate through 300+ pages here, would it be an idea to keep a separate page on this or SNTG or somewhere else for an updated definitive list of key points that we think politicians may actually listen to? For reference.

I've just replied to the RLA request for input thus:

'The only possible alternative/amendment can be to make it not retrospective - so it should only apply to new purchases. I believe this is the normal and only fair way with tax changes. Although this will stymie the market at least it won't punish those of us who have built up portfolios over a period of several decades and will be ruined if we don't take dramatic evasive action, like selling up quickly.
I'm not in favour of having a CGT or SDLT amnesty as what is the point in putting businesses into limited companies? That does nothing - it doesn't improve a house or have any tangible benefit at all and George Osborne considered getting rid of the right to offset finance costs for limited companies in 2010, so he could always spring that one on us a year later.

I think it would be helpful to let the Treasury know that we are also considering legal action if it goes ahead. I believe the only reason it has been put forward is that we are seen as an easy target, as a vilified group. Some independent research which could clearly show we are a discriminated-against group would be a good starting point for taking action. Also the Human Rights Act and the right to property could be relevant. I'm not saying we definitely would take legal action, but it would be useful to mention this.
Anyway, I've got a lot more to say, but I have written to yourselves and commented on your blogs several times in the last month or so and never had an answer, so I'm not even sure if this will be read.'

Reply to the comment left by "Mark Shine" at "19/08/2015 - 23:33":

Hi Mark.
If you can let me know via Mark when your meeting is, I may be able to pass you our submissions to the Public Committee on the Finance Bill before your meeting. I can't publish them here as they must have not been previously published. There are a lot of the main points in them. Also if you look on the saynotogeorge site - that would be another way.
Try and enjoy your holiday! We're all handling it and would rather you come back refreshed. Have another shandy. That's an order!

Here is an interesting article by Richard Dyson from May this year.

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11591986/Mortgage-rate-rise-would-make-buy-to-let-unviable-in-7-out-of-10-regions.html

It claims mortgage rate rise would make buy to let unviable in 7 out of 10 regions. With proposed tax changes now also planned, it is likely that buy to be won't be viable anywhere.

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "19/08/2015 - 23:40":

Yes, BTL. Richard Dyson seems to be the most switched-on of all of the journalists in the UK. I am looking forward with baited breath to see his next article, with our very own Connie starring!
In terms of the article you mention, it's interesting isn't it, that we all have always had to worry about interest rates and what they might do to our businesses - but I always have seen that as a kind of act of God and we'll all be in the same boat etc. -n and of course we wouldn't then have that increased interest redefined as profit to be taxed on. Honestly, I feel I'm living in a twilight world and this thing cannot be real.
The feeling of having this sprung on us is very different - it's a personal attack really, based on false assumptions of who we are and what we do - scapegoating and discrimination - that's why we're all so damned furious.

Reply to the comment left by "Appalled Landlord" at "19/08/2015 - 13:38":

AP
I have not had a response From Megan Shaw re:
"1 BTL and HMRC tax me out of business" as yet, if no reply by tomorrow I will follow up with another email.

I Will also request what data source & mechanism was used to arrive at the figures claimed in her comments - as i cannot see how they can do more than guess... each individuals employment circumstances, salary, prop val, LTV gearing, int rate & yield are variables in the outcome of the proposed changes.

I also cannot see the sifnificance of the 35K ?
It is plain to see that low yield, highly leveraged props will cause huge problems for some people, especially for anyone currently in std rate bracket.
In percentage terms of their overall income they are going to be hit much harder than than "the big boys" and these are very likely to be the families that rely heavily on tax crdeits & child benefit to support their earned income and meagre BTL profits. For them to be pushed in high rate then taxed on no existent income then double stuffed by removing the tax credits & Child benefit is going to cause clear financial devastation for them.

I am intrigued to understand how the figures quoted have been produced.
The appear to be very misleading at best from where i am sitting.

I am now officially in my waders as i am getting knee deep in claptrap from all sources.

The simple stance set out on the Budget sounded plausible and possibly reasonable on the face of it " rich Landlords will have to pay a bit more tax , and those that have save hard and rely on BTL will not - std rate tax payers will not be affected"

This is what was said:

"That said, buy-to-let landlords have a huge advantage in the market as they can offset their mortgage interest payments against their income, whereas homebuyers cannot. This has contributed to the rapid growth in buy-to-let properties, which now account for over 15 per cent of new mortgages, something the Bank of England warned could pose a risk to our financial stability. For this reason, I think it is sensible that the Chancellor announced in the Budget that mortgage interest relief will be limited to the basic rate of tax.

Prior to this change, for every pound of mortgage interest costs a top rate taxpayer incurred, they got up to 45p back from the taxpayer. Furthermore, the better-off the landlord, the more tax relief they get, which I cannot support. This will now be reduced to 20p, gradually over four years from April 2017. I believe this strikes the right balance between tackling this unfair advantage for the richest, while recognising that at the other end of the spectrum many hard-working people have saved and invested in property depend on the rental income they get, and tenants benefit too from a competitive sector."

One simple example direct from HMRC illustrates very clearly that those statements are wholly untrue and do not do what was set out at all. the little guy is going to get hammered very hard indeed (recognising the hardworking people who saved and invested in property ..?).
On this basis and this alone - the proposal, as is, should be withdrawn.

"Only 1 BTL & HMRC tax me out of Business" has ultimate creditibilty - HMRC themselves produced it.

THIS IS WHAT NEEDS SHOVING UNDER MP's Noses to stop them sending utter twaddle as response to our concerns. To me the ONLY way this is possibly workable is to implement it on new purchases.

http://www.property118.com/only-1-btl-and-hmrc-tax-me-out-of-business/77297/

I did not quite appreciate from the election debate the quality of Natalie Bennett. A revealing radio interview is available at: https://www.youtube.com/watch?v=YzGyEXPDQBI where she explains the rationale behind our current problem. Not to be missed.

In another interview, with Andrew Neill, she demonstrates her brilliance over a wide range of policies.: https://www.youtube.com/watch?v=32aqb167NkE

On election night she claimed the Green Party had 62,000 members

Reply to the comment left by "Appalled Landlord" at "20/08/2015 - 01:14":

Dear oh dear , 500,000 homes to be built from Private LL tax relief removal, @60K per home, tot 4.5 Billion tot cost ...from LL - Strewth that was painful to listen to.

Nothing personal but -"clueless boot " springs to mind.
How can these people be allowed to speak with no idea what the figures are ?

The current conservative proposals are equally as ridiculous tho .