Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "syed shah" at "14/10/2015 - 22:17":

I have not seen anything, my only interpretation is I think this has come from the figure ive seen of by 2020 the higher rate tax will start at an assumed £50k.

I think someone has assumed if you only have rental income then effectively the first £50k will be tax deductable maybe.

I have not seen anything that would suggest the government would make that much of a u turn, although it would be nice even if they said the first £10k interest (or whatever tax free allowance is at the time) will be tax deductible, this would solve the issue of 20% tax payers becoming 40%, it wouldn't cover all my mortgage interest but at least most of it.

Back on planet earth of course even £10k allowance would negate the whole point of the changing the tax which is to make a populist change to try and win over voters.

I was talking to someone today, not about property but about how the government was looking at capping pension relief to 20% and made me realise just how fickle people are, this was a 50 something year old woman who is intelligent.

Her initial reaction was "Well that sounds like a really good idea".

When I explained but what happens if then effectively I pay 20% tax but when I take my mortgage I could because of either still working or because of rental income already be a higher rate tax payer meaning I would then pay tax on that pension income at 40%... Why would I pay 20% and then pay 40% when I could just pay 40% and have the cash in my pocket.

She only then realised "Oh yeah actually that wouldnt really work"..

But I think we will run into that same mind set even more of tax everyone but me, tax rich people not me and as landlords even if we make very little profit we are still seen as rich so everyone is for taxing us more.

"tax rich people not me and as landlords even if we make very little profit we are still seen as rich so everyone is for taxing us more."

This is why it should be known as the Tenant Tax. People don't like the thought of taxing tenants! All sensible PBC submission and all intelligent comment from all quarters says rents will increase as a result of the Tenant Tax (Clause 24) to pay for the tax. I'll collect the tax but be clear... I have no income but rent... This is what I do for my living.. Call it unearned if you wish but walk a mile in my shoes and you will know it is earned.

The increase Tax has to come from rents which comes form tenants = Tenant Tax- Tax me all you want, but know what you are doing and where the money will come from! I'll collect Tenant Tax for you - if I can and if i can't.... aint noting I can do but withdraw the service which in this case is a tenants home.

No need to be cleaver to work that out

Reply to the comment left by "Mark Brown" at "15/10/2015 - 00:41":

Mark, I can understand your frustration. We are all suffering from same plight.

Are you landlord in Guildford only or you operate in different parts of the country?

http://www.ftadviser.com/2015/10/15/mortgages/mortgage-products/paragon-launches-top-end-landlord-range-U0gSvkJtAdGcSdWmXT6ywO/article.html

Paragon update product range to capture landlords affected by tax changes. The only stumbling block is SDLT and CGT!

So who'll all you upset landlords vote for next time round cant see Labour reverse a populist if ill conceived tax lets hope theyll do a u turn

Reply to the comment left by "Simon " at "15/10/2015 - 09:23":

I used to believe that your vote should be cast in the national interest, but if a party proposes a policy that will ruin your business then you will not vote for that party. I can honestly see the screw being tightened further on landlords by Labour and probably the Lib Dems. However, I never foresaw the so called party of business introducing a hard left policy such as this one.

At the moment my vote will be - 'none of the above'!

Lets see what happens.

Reply to the comment left by "Manchester Landlord" at "15/10/2015 - 09:20":

ML, this is predominantly geared towards new entrants in the market.

This from Tax Insider today:

Tax Insider exhibited at the Property Investor
Show last week and the one question almost every
landlord asked was “How will the property tax
changes proposed by the chancellor affect me and
what can I do?”

The harsh reality is that very few landlords still
understand the implications of the proposed tax
changes. Despite campaigning by landlords,
landlord associations and even accountants the
government is ruling out any re-think on its
proposals to reduce the landlord tax breaks from
next year.

The Financial Secretary to the Treasury, David
Gauke, has written to the Residential Landlords’
Association to emphasise the determination of the
government to plough ahead with the changes, first
announced in July by Chancellor George Osborne.

I have received a standard 'begging' letter from the Conservatives i.e. please join or donate...I'm not sure if the reply will be read, but I did reply and will keep on replying with this:

'Before the Summer Budget I was on the point of joining the Conservative party and donating. I have been a Conservative voter all my life.

If Clause 24 passes into Law I will never vote Tory again.

I have worked hard to support myself all my life...no benefits...I am now 61 and have just about positioned myself to have an income from properties I let.

When I divorced, my then husband kept all his pension pot as I stood to inherit my mother's house. I paid the Inheritance Tax on her death. The only pension I have is the State Pension.

The rent from my late mother's house is my main income. It is not suitable for first time buyers.

Another of my properties is likely to come vacant in the next 6 months. I will probably leave it empty and use it as a weekend retreat. As George Osborne stated we have 4 years to readjust to the new regime...I'm already doing it.

If this Restriction of Interest Relief goes ahead I will have no choice but to put up rents...I have already started.

So that's five people's rent rises from one house, and one house unavailable to rent. Is that what you wanted by implementing Clause 24?

It is not acceptable that the costs incurred on making a profit should not be completely tax deductible. This is not applicable to any other sole trader, business, other EU country or G7 country.

Also, these new rules will make it virtually impossible for me to remortgage in the future, so when interest rates rise (which I had previously allowed for) it will hit me even harder.

Who do you think will bear the brunt of the new Tax? ........The tenants. Rents will raise and there will be less property to rent.

I am a lifelong Conservative voter. If Clause 24 passes into law I will never vote Conservative again.'