Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Appalled Landlord" at "16/07/2015 - 17:20":

Hi, yes, I think that way of looking at it is more correct.

I was thinking of myself on £0 other income and once interest rates go up and my actual profits go down and I have to get a part-time job to pay my property tax (on top all the maintenance, paperwork and legislation involved with 25 tenancies), even at minimum wage I'll effectively be taxed at 20% of every penny I earn ... to pay the tax on money I don't earn.

Before you ask, no, not bitter at all! 😉

I'm wondering if the e-petition could come from us first and then we could pass it on to all landlord bodies we know to circulate - RLA, NLA, the Guild of Residential Landlords, Landlordreferncing, Landlordzone - can anyone add any more? It should be very impartial though and not have any organisation's name on it. that way, we could avoid arguments between competing bodies. In South Wales there are also a few other networks as I am sure there will be all over the country, who could also circulate it. So it would be the usual, 'we, the undersigned....' If anyone is inspired to attempt the wording, here's your chance!

Reply to the comment left by "Ros ." at "16/07/2015 - 20:27":

The organisations with the largest databases are the deposit protection providers.

They need to take an interest in this too, otherwise their customer base will shrink.
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Would it be worth me approaching my one - the DPS?

Reply to the comment left by "Ros ." at "16/07/2015 - 20:38":

It certainly wouldn't do any harm. If they were to start an unbranded petition and market it to their members we would be off to an immediate flying start! I'm sure they would be better placed to influence all the other organisations too.
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Hi All

Sorry in advance for the long post. I will not do this again, but this is my first so please forgive me.

I am new here although have been following this forum for a few days. Like no doubt countless other landlords, I have been looking at forums (or fora as some would correct me) over the last week or so trying to work out what the implications of the budget speech will mean for me. Ironically it was actually some posts I saw a few days ago on the very active housepricecrash website that actually led me to this forum. If anyone doesn’t know the HPC website, here is a fairly accurate description of it: http://www.propertyinvestmentproject.co.uk/blog/house-price-crash-hpc-website-mentality/

I was actually thinking before Mark posted his remarks on this thread, that it did appear that one of the hpc characters might have made a few appearances on this thread.

My income is now entirely from residential property (10 properties in London). My wife is already a higher rate tax payer, before anyone suggests an option… my figures from 2013/14 my last submitted tax return via my accountant are:
Property income
20. Total rents and other income from property 215107

Property expenses
24. Rent, rates, insurance, ground rents etc. 2598
25. Property repairs and maintenance 20380
26. Loan interest and other financial costs 81762
27. Legal, management and other professional fees 2006
28. Costs of services provided, including wages 35
29. Other allowable property expenses 15068
36 10% wear and tear allowance 21510

Calculating your taxable profit or loss
38.Adjusted profit for the year – from box O on
the Working Sheet 71748
40. Taxable profit for the year 71748

If anyone wants to have a crack at working out what my tax will go up to in 20/21, please be my (very welcome) guest. Although I realise that is very cheeky request, so no worries, I will ask my accountant in due course.

Petitions – I completely agree with others that there needs to be ONLY ONE from all interest groups to be most effective, so no point in jumping the gun. This has happened in other cases (eg fair & representative voting systems recently) where competing petitions actually diluted the impact.

Letter to my MP – I will write to mine in due course, but want to make sure I focus on points that may be taken seriously. Leaving aside whether the withdrawal of mortgage interest as a business expense is right or not, I agree with others that it does seem a little unfair that it will be retrospective for previous/ existing loans. After an MSc in Property Development & Planning and then a few related jobs thereafter for some years, I decided to became a sole trader. Whether to go ‘sole trader’ or ‘ltd company’ was unclear and the advice was unclear. In the end I opted for the former. But of course after the recent news, I may soon learn to regret that decision.

Legal challenge – this is a just an random idea, but I wonder if the implications are applied retrospectively, is there any mileage in considering a legal challenge against George and crew, given that I and many others entered into contracts (legally) with our lenders? He and his budget policy clearly do not care about ‘generation rent’ or indeed resolving the housing crisis but merely finding an easy target to help fill the gap left by the deficit.

I’ve had my fair share of tenants from hell, two of whom had to be evicted after they chose not pay rent for months. They were savvy and knew their ‘legal rights’, despite trashing everything. It was a very long and unpleasant experience on both occasions. I am a decent person, get any repairs and maintenance issued dealt with immediately, far quicker than many owner occupiers would do for their own properties and many of my tenants have said I am the best landlord they ever had. Although if I was as brave as Mark to frequent their forum, no doubt some of the keyboard jockeys at HPC would just say: ‘You lot always say that, you’re just an opportunistic and dim witted scrounger simply BECAUSE you are a landlord’.

" HMRC states that the objective is to make the tax system fairer. In fact it is iniquitous."

They will say anything to justify their end. Remember parking charges etc was introduced to solve the flow of traffic, congestion zone was set up for the same.

Vigilance cameras were there to protect us from terrorism and of course it was isold to us as such. The information is being used for all & sundry.

Making banking & simple financial transactions had been made difficult under the guise of " money laundering ". While the top management of the Banking sectors has been laundering on an industrial scale.

OK, As we have to ask concise questions and NOT ramble on, I am going to try this tomorrow :
Following the Chancellors proposed reduction in interest relief for private landlords (whilst exempting those who have a Ltd company structure) which implies that many buy-to-let landlords will end up paying more tax than they are actually making in profit, that many highly geared landlords will face bankruptcy due to this measure and the double tax whammy of CGT hitting them as well, and bearing in mind the mass of distressed sales which will result, not to mention the thousands of rental homes which will become unavailable as a direct result of this measure, can Mr Gove ask George Osborne to reconsider this measure which is grossly unfair and discriminatory to these small business owners, and if not withdraw, then at least consider an amnesty on SDLT/CGT charging to move to Ltd structures, or apply the measures only to purchases subsequent to 2017

Reply to the comment left by "Ian Simpson" at "16/07/2015 - 22:09":

That's one hell of a long sentence but it does cover they key points.
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Reply to the comment left by "Ian Simpson" at "16/07/2015 - 22:09":

Hi Ian

You’ve done a magnificent job of combining the various aspects.

However, Mr Gove probably hasn’t a clue about this subject. He may think that only 1 in 5 landlords will be affected, that it will not affect those who are currently in the 20% tax band, and that it will make the tax system fairer.

He will not understand how it is possible to be charged tax on zero income, and how this would lead to bankruptcy, divorce, suicide, and an increased burden on the state.
May I suggest that you print the suggestions that Mark, Ros and I sent you, and give them to Mr Gove so that he can understand the problem, and its consequences better.