Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Neil Robb" at "03/10/2015 - 15:16":

Neil If they were in commercial employment they would be sacked and jailed for their deeds. Why are MPs exempt?

Reply to the comment left by "Mark Shine" at "03/10/2015 - 16:06":

Mark I am one of the fortunate few who is "in the above paragraph" and I will take advantage of the situation for I run a business (HMRC please note). All's fair in love, war and business (despite the protestations of my girl friend).

I am nevertheless firmly opposed to clause 24 and will do everything in my power to try to defeat it.

Like I said you should all read this. A few appetisers:

RANJAN
Never before has a Chancellors budget affected so many, but so cleverly worded that so few
of those affected, actually fully understand the impact on their livelihoods.
I am surprised how blissfully unaware so many property investors still
are about the serious blow that has been dealt to their property business.
In a nut-shell, if you have a buy-to-let mortgage on a property you let out, you will pay more
tax and you could possibly make a loss as a direct result of this new tax.
I have written this report to raise awareness
among property investors so that people are fully aware of what’s happening. Once
property investors better understand the confusing nature of this tax and how it unfairly
affects them, it will encourage people to make a bit more noise in protest. So far there has
been relatively little media coverage perhaps because public opinion seems to be so against
Landlords right now.
Once you have read and digested this report, please Sign The Petition. (Once there are
100,000 signatures there may be a debate in parliament). I would also urge you to Find Out
Who Your MP is and write to them.
However, I don’t feel it wise to pin the entire future of your property business on the ‘hope’
the Government may change their mind.
If you read the Finance Bill (clause 24 is what affects Property Investors most), you will see
that the draft legislation is quite detailed and I believe quite calculating in what it aims to
achieve. While a complete u-turn is unlikely, we can expect better transition arrangements
for existing property portfolio owners.
Since the budget, I have spent over 100 hours in meetings with 41 different professionals in
a mission to seek out the best advice on how to address the challenges thrown up by this
Budget. I have consulted with Accountants, Strategic Tax Planning Consultants, Tax
Barristers, Property Lawyers, Lenders and other property investors in my research. What I
have discovered is that you will need help from several different professional service
disciplines to arrive at suitable solutions.
The Summer Budget of 2015 is quite simply a game changer for all owners of residential
buy-to-let property funded by a mortgage. You will soon not be allowed to offset all your
mortgage interest against your rental income. Due to the complex way they are proposing
to implement this, you will end up paying a lot more tax than you may at first think.
All this came out of the blue because there was no mention of it in the Conservative Party
election manifesto. In fact, this proposal only appeared in the Green Party election
manifesto, which was widely ridiculed as being unworkable.
I can’t emphasise enough what a game changer this is. There will be winners and losers.
Some will decide to sell up or go bust while some of those who plan ahead will find
themselves in a better position than they are now.
This report will address the 3 key budget changes which will affect property investors. The 3
key budget changes are:
1. Limiting mortgage interest relief;
2. Removal of 10% wear and tear allowance;
3. Changes to dividend extraction rules from Limited companies
Like it so far? He is not wrong! Download it for yourself and read on.

I will do the same over W/e but have be elsewhere just now

The following article contained a very sad piece of news about a man who committed suicide. If Clause 24 goes ahead, there will more cases like this, as people are driven into desperation. The human cost of this financial tyranny is going to be immense:

'In an interview with the Daily Mail almost four years ago, Mr Cole said the investment in a 'worthless' piece of land – which was supposedly due to be developed into an exclusive settlement for Bucharest professionals – had left the family 'virtually penniless' and shopping in charity stores.

He said: 'We are living under such tremendous pressure I fear what the long-term consequences could be. I am worried about losing my place in the world and am deeply worried that my children have lost their place in society.

'I feel like a man castrated — unable to do what I should for my family. My naivety has destroyed the plans I had for my children. I can’t find the words to describe the agony.' His children had to be taken out of their public schools and were then taught privately at home.

http://www.dailymail.co.uk/news/article-3256983/Businessman-5million-debt-building-84-property-lettings-empire-shoots-dead-country-manor-home.html

I think we should do some research into bankruptcy and what happens to the bankrupt person and their family - family breakdowns, divorce, mental health consequences, suicides. and so on.
It would also be useful if we could somehow work out projections of the numbers of landlords likely to get into terrible debt and/or be made bankrupt; although even losing your life's work - 20 or 30 years building up a business for income and retirement, only to have it stolen from you through this confiscatory tax, would be enough to tip many over the edge.

Do u think it's a sabotage act for reasons we are not privy to or just basic mistakes on the impact it will have on the PRS

Reply to the comment left by "Steven O'Neill" at "03/10/2015 - 17:36":

It is simply a case of Osborne pandering to the left in the hope that he will pick up some more votes for the next election - we all know his intention to run for PM. I for one will never vote conservative again - there are no political parties which represent my values anymore. It's a sad situation, and it's only going to get worst for us landlords.

Reply to the comment left by "Steven O'Neill" at "03/10/2015 - 17:36":

My feeling is that they had a good idea what it would do to portfolio landlords and thought 'hard luck' to us - they don't care and our numbers aren't large so they won't lose a lot of Tory voters - and also Labour will be equally obnoxious towards us, so they may think we would be stupid enough to still vote for the people who want to destroy our livelihoods. They obviously assume they will gain some long-term voters in the OOs they to buy our houses from us.

But I think they did not do their sums correctly and did not realise the number of basic rate taxpayers who will go into the higher bracket. Apparently, the Treasury are now bricking it over this as this will be a much larger number of Tory voters lost - the RLA estimates 60% of LLs are in this category.

I also think they have not thought at all about the impact on tenants and did not take account of the issue of rent rises and also other knock-on effects, like homelessness, B and B bills etc.

Obviously they expected there to be a flood of properties available to OOs and were looking forward to the CGT we'd have to pay. I also think the UKAR argument is important - that they would force people to sell and redeem these mortgages. So the money motive is there.

But I think they blindly followed the OBR assessments about impact, which they will be starting to realise are quite wrong and inadequate. And I also think the Treasury will be in disagreement with the Bank of England behind the scenes, as the Treasury, through this policy, is pushing the economy into the very direction the Bank of England wanted to avoid.

There are all kinds of other complications/factors - like whether they are doing this for their pals in big business. But it is very ill thought out and I do think they could come a real cropper with it. I believe it will be reversed although I have no idea when. This is what happened in Ireland.

We must not see any particular deadline/event as the end of this - for example, if we do not get an amendment and the Bill goes right the way through and receives Royal Assent, as it is. They could have brought it in straight away and if they had, we would still have to get it reversed 'after the event.' So we have to plan to stay in this for the long haul and pace ourselves. If people have to stand back for a while - eg. because of having other day jobs - that is fine and they can then get active again, when they have the time.

That's how I see it.

Reply to the comment left by "Steven O'Neill" at "03/10/2015 - 14:26":

That four months will double when whole country on it, it will be melt down.

But I suppose IDS will say its not his systems but the sheer number of homeless people they now have!

Reply to the comment left by "Steven O'Neill" at "03/10/2015 - 17:36":

Worse than either of your options, I believe it is gross incompetence. It is part of the chancellors job to have an ACCURATE impact assessment of any action he proposes to take.

Reply to the comment left by "Chris Novice Shark Bait" at "03/10/2015 - 15:01":

It is a very good read and its great hes going to be letting everyone know when he speaks