Summer Budget 2015 – Landlords Reactions

Just got an email from Martin and Co (not had time to read it yet, but can see some very relevant headings as follows:

http://www.martinco.com/news/2015/09/01/20-of-landlords-to-quit-because-of-tax-break-change/?utm_campaign=mac-news-section&utm_source=hs_email&utm_medium=email&utm_content=21815233&_hsenc=p2ANqtz-8NvvAyYk06iHgArReI3S189nMqVIfH18BvvV0uXRn7EbU2mb1Ua08SoA96OvXEVYaAV58BTckDppHkeEmmT8WIpk4UMA&_hsmi=21815233#.VeyDOpfcB68

http://www.martinco.com/news/2015/09/03/shelter-renews-attack-on-private-rental-sector/?utm_campaign=mac-news-section&utm_source=hs_email&utm_medium=email&utm_content=21815233&_hsenc=p2ANqtz-8kkJpeo_F9vEC8ZvhccIAGpsGhdI3zCqvKG7vnT3QyfKwVzKQXPuup_EYF_dlVRB91AJfUOZpOGuSQP27zACm9Mfc0IA&_hsmi=21815233#.VeyDtJfcB68

Reply to the comment left by "BTL INVESTOR SCOTLAND" at "06/09/2015 - 11:12":

BTL IS – On the basis that it would be an alternative not an addition to this non-incorporated BTL tax grab, I agree with your suggestion mentioned in post I’m replying to. Ie ‘Non-principal private residence tax’, whether it was tax deductible or not. That other active and often delusional forum (HPC) seem to be convinced that Clause 24 was thoroughly thought through by their new mates @ The Treasury, prior to the budget speech. For a multitude of reasons, this ttt was/is by no means the impression I am getting. Before, during and after my meeting with my MP, a Treasury minister. My wife who also spends a lot of her time lobbying political parties and meeting MPs in another unrelated industry also confirms that govt policies & proposals in her field are often not thought out very well and the MPs she meets often know very little or have real experience about the subject matter.

So in this regard, as BTL and Roger Rabbit have suggested today, I think we SHOULD be considering proposing alternative policies to the Treasury.

I have not posted there but had a look at the comments section in the Telegraph article today, as expected they appear to be mostly from a handful of HPCers. The same folk who seem to spend literally 24-7-365 spreading their (often carefully selective) viewpoints on webforums, without considering ALL angles.

An annual rented homes tax does not seem that bad an idea and it would be a lot fairer than the proposed interest and wear and tear changes but as another poster said why should this business pay a specific tax to exist?

Also its no guarantee of anything and could be worse in that both might be implemented.

I suppose the big thing to take away from all of this is that future investments should be more diversified

Also a general question to the older landlords (55+) with multiple properties

If you have made enough money to retire on and any further rental income or capital gains is just adding to a pot that's already too big to spend before you die...why continue?

And I don't mean this with regards to the recent changes.

Hi all.
As you know, the Finance Bill is going to be debated in Parliament on Tuesday. With this in mind, the more of us who can send a letter to our MPs, the better. Also the more of us who can send some to other key figures in Government - Treasury Committee members, Business Ministers and so on, the better. I have just sent a personalised email to my Labour MP asking him to support us. And I have drafted a sample letter here and would encourage people to use it or write their own. Obviously, it would need to be sent by the end of tomorrow, so this is short notice, but better late than never. Perhaps you can also report back if you do manage to write, urging support on Tuesday.
Thanks

Dear.....

I am writing to you with regard to the Finance Bill, which is to be debated in Parliament on Tuesday. As a landlord, I have been shocked at this sudden and brutal against our businesses and am hoping that you can help to oppose this draconian and punitive tax. For the sake of brevity I am going to refer you to a few articles which summarise many of the issues and would just ask that you take a look and then, if possible, speak out against this 'Clause 24,' which aims to tax private landlords regardless of whether they make a profit and even to tax them on a loss - a bizarre and grossly unfair idea, that I can hardly believe has been seriously suggested in an advanced country such as the UK. A set of articles can be found here:

Death of buy-to-let: landlords wake up to Osborne's 150pc tax

I am also pleased to say that the Telegraph has continued the campaign over the weekend. The media is generally so anti-landlord, that it is a relief for us to have one voice of reason out there.

I've pasted the link here to the article.

'I own 75 buy-to-let properties but I haven't deprived other buyers'

The case studies in it of portfolio landlords are particularly interesting and show how the Government's policy will kill off buy-to-let mortgages and the businesses of landlords who provide a critical role supporting the housing needs of the UK. The impact of the policy will also include stopping expansion of the housing stock just as more housing is needed, as no landlords dependent on finance will build or renovate old housing now to bring it back into use (a model I have used for years).

The justification by George Osborne for this attack on landlords suggested he would be creating a 'level playing field.' This has since been conclusively proven to be wrong. If you have time, it would be worth you looking at this other link which shows that there is a very uneven playing field, but that it goes in the opposite direction. Landlords would actually love a level playing field with owner-occupiers as we would have to pay no tax on our rental income or any CGT when we sell houses which have increased in value. There are many other advantages too of being an owner-occupier; not just tax advantages.

A Level Playing Field Between Homeowners and Landlords | Property118.com

Apart from this 'turnover tax' being wrong in principle, it is also wrong to make it retrospective - applying it to properties that were bought years ago under the current tax regime. The Treasury and the Chancellor keep reiterating the idea that they are giving us 4 years to get ourselves organised - when in fact it's supposed to be starting in just over 18 months' time. In any case, the only realistic options we have are to put up rents (which won't be enough to compensate for many), to sell or to go bankrupt. What a great set of choices they're giving us. And why? Are we drug dealers? Do we sell alcohol that makes people ill? No. We provide rented accommodation.

Many of our tenants are going to be have a very nasty shock when their rents go up and/or they are given their notice. A report has shown that 20% of landlords are likely to leave the rental business as a direct result of this measure and no-one knows how many properties these 20% own, so we are likely to be looking at massive chaos in the private rental sector.

The Government through this tax states that it is favouring owner-occupiers, but what about tenants? Tenants have been ignored and don't even figure in their impact assessment. Many of these people are going to be devastated to lose their homes. But this is inevitable as how can we, as landlords, pay out of our own pockets indefinitely for people to live in our houses, as we will have to do when interest rates rise and we are being taxed on a loss? (many of us can handle interest rate rises per se - just not when our costs suddenly appear as our 'income,' on which we are to be taxed). Housing Associations may be able to pay for people to live in their houses, operate at a loss and get bailed out at some point - and the staff still receive their salaries at the end of the month - but private landlords can't, when we rely on the 'profit' for our living.

If you have time to read up further on the complex issues involved, I give you another link to an article which explains more about what is so wrong about this idea.

Restricting finance cost relief for individual landlords

Anyway, I hope you can support us with this and persuade some of your colleagues to follow suit. We need to have some people speaking in the Commons who are not repeating nonsense about 'generous tax relief' and hitting 'the wealthiest landlords' (when it is in fact hitting the landlords who owe the most and leaving the wealthiest landlords, who don't have mortgages, untouched).

Yours sincerely

Reply to the comment left by "Ros ." at "06/09/2015 - 21:38":

Great letter Ros. I will certainly send it to my MP, although i am still waiting on a response from my first letter. Is the debate live on BBC new parliament channel?

Reply to the comment left by "Appalled Landlord" at "06/09/2015 - 16:35":

Agree Appalled Landlord there is a risk but if we don't suggest alternatives that would cause less harm there is a risk we will end up with the current proposal being implemented in its current form. Clearly my preference would be for the current proposal to be scrapped and not replaced with an alternative tax. Alternatives have already been suggested by RLA and NLA but no one to my knowledge has suggested a non-private residence tax/levy.

Reply to the comment left by "Ros ." at "06/09/2015 - 21:38":

Hi Roz the links have not come through on your post. Just so you know - I can find them anyway

Whoops - just spotted a typo - missed out the word 'attack' after 'brutal' - so if people can double-check and if possible send with the links attached - they were attached in my email to my MP but I'm not very technical. If you open the links in your browser and re-paste them into your emails, it should work. Doesn't take long. Hopefully, a lot of you can spend a quarter of an hour or so on this. Actually, it could be a good thing to send it the day before the debate as it might be fresh in their minds.
If there are any volunteers to send emails to all of the Treasury Committee members, can you let me know? I will then have time to target some others. Also, if anyone can think of certain groups or individuals to target that would be great (even better if you can also send them the emails) and we could look for more volunteers. The more of these things we do the more likely that one of them will be the thing that turns this tide and hits the spot,

Reply to the comment left by "Ros ." at "06/09/2015 - 21:38":

Hi Ros,

I've found 2 of the links, where does this one come from?

Death of buy-to-let: landlords wake up to Osborne’s 150pc tax

Is it a Telegraph article?