Summer Budget 2015 – Landlords Reactions

Ros, I agree the hands on / hands off thing is a red herring. Either you or your partnership or company do it all yourself or you outsource services and pay for it, like other businesses. I do it all myself because I am confident I can provide a superior service. No offence to residential letting and management agents (I used to be one myself for a year or two, before getting a job with a developer).

Talking of ‘hands off’, I used to work for 6 months in the commercial property sector, so am familiar with commercial leases - FRI (Full Repairing and Insuring by tenant), where the tenant also does the fit out required and the standard leases include upward only rent reviews at predetermined intervals (unlike standard ASTs). Commercial landlords (whether institutions, small one man band ltds or sole traders) are genuinely ‘hands off’ and their investments are more akin to the share investing comment that was in the govts response to the petition today.

BTW as for your ‘no shows’ comment: always ensure you call or text them a couple of hours before asking for further confirmation of viewing attendance.

...And the government responds!!!! Predictably, the response is the stock government rhetoric we were given on Day 1.... Hopefully all your submissions to the Treasury select committee and the newspaper reports and letters to MPs etc will do something. I am not sure how else I can help - have written to three MPs, spoken to one, emailed and spoken to all friends, relatives and contacts to spread awareness and signed the petition... Happy to do a submission if I knew how and where to send it

The Government has responded to the petition you signed – “Reverse the planned tax relief restriction on ‘individual’ landlords”.

Government responded:

The Government is committed to a fair tax system so is restricting relief on landlord property finance costs to the basic rate of tax, reducing the generosity for wealthier landlords.

The Government is committed to a fair tax system so is restricting tax relief landlords can claim on property finance costs to the basic rate of income tax.

Landlords are currently able to offset their mortgage interest and other finance costs against their property income, reducing their tax liability. This relief is not available for ordinary homebuyers and not available to those investing in other assets such as shares. Currently the landlords with the largest incomes benefit the most, receiving relief at their marginal tax rates of 40% or 45%.

By restricting finance cost relief available to the basic rate of income tax (20%) all finance costs incurred by individual landlords will be treated the same by the tax system. This recognises the benefits to the economy that investment in property can bring but ensures the landlords with the largest incomes will no longer benefit from higher rates of tax relief.

By unifying the treatment of finance costs for all individual landlords, the Government is reducing the distortion between property investment and investment in other assets, and reducing the advantage landlords may have in the property market over ordinary homebuyers.

Less than 1 in 5 (18%) of individual landlords are expected to pay more tax as a result of this measure. Taking account of the other measures from the Summer Budget, the Office of Budget Responsibility (OBR) have not adjusted their forecast for house prices. The OBR expect the impact on the housing market will be small. Furthermore, this change is being introduced gradually from April 2017 over 4 years. This will give landlords time to plan for and adjust to these changes.

HM Treasury

Click this link to view the response online:

https://petition.parliament.uk/petitions/104880?reveal_response=yes

The Petitions Committee will take a look at this petition and its response. They can press the government for action and gather evidence. If this petition reaches 100,000 signatures, the Committee will consider it for a debate.

The Committee is made up of 11 MPs, from political parties in government and in opposition. It is entirely independent of the Government. Find out more about the Committee: https://petition.parliament.uk/help#petitions-committee

Thanks,
The Petitions team
UK Government and Parliament

When a Government comes up with such an outrages policies, it expects a back lash and had prepared stock replies and all & sundry involved will be instructed to sing from the same hymn sheet in order to show the reasons what ever they have done has been done in agreement and harmony.

These kind of stock reply will only make me more resolute.

Buy-to-let investors must act to beat tax crackdown

BREAKING NEWS
28 August 2015
By Emma Lunn

Buy-to-let investors must act to beat tax crackdown
Tax specialists have urged buy-to-let landlords affected by Chancellor George Osborne’s tax crackdown to act now to ensure their sums still add up.

Landlords could lose thousands of pounds per property after the Chancellor announced a crackdown on higher rate tax relief in his emergency Budget in July, to be phased in from April 2017.

Specialist accountants have warned that amateur landlords face a severe dent in their profits.

Now accountancy firm Baker Tilly has urged affected landlords to reduce their finance costs ahead of the change.

Gary Heynes, head of private clients, said investing cash and borrowing for property may have made sense to some, but may not work any longer.

“With the changes meaning an extra 20% or 25% or even 40% tax on the finance costs, it may now be better to repay borrowing rather than keep cash invested.”

Others may consider rethinking who owns the property, he said “If held in a sole name, it may be better to transfer to a spouse or civil partner either entirely or partly.

“While this should be free of capital gains and inheritance tax, a stamp duty liability could still arise.”

This was increasing housing units and stopping shops office being vacant boarded up

Office to residential conversions

Time frame for expiring 30 May 2016. Government as NOT made it clear it will be extended
This is the view of a Town Planning Consultant
The delay and procrastination by the government in addressing this issue simply means more stalling of res development and results in a barrier to continuing the momentum of economic growth.

To my mind the "business or trade vs hands-off investment argument" is best illustrated by the simple fact that you can have good and bad landlords. If it really was hands-off, the quality of the landlord would not have a significant impact on the experience of the tenants. Investors are hands off - they buy shares, they sell shares, the businesses and their customers don't even know they exist.

I'm going to use that description of a business. Still trying to find the best way to speak to my MP without sounding condescending.

What ever happened to the tax term "wholly and exclusively for the business"

Reply to the comment left by "Christian Douthwaite" at "28/08/2015 - 08:16":

The Government is committed to a fair tax system so is restricting relief on landlord property finance costs to the basic rate of tax, reducing the generosity for wealthier landlords.

I had to laugh at that bit.

It's a bit like a mugger stealing your wallet but having the generosity to let you keep your mobile phone.