Summer Budget 2015 – Landlords Reactions

a bit of a change of subject, but I wonder if anyone could advise on an issue arising from the 3% extra stamp duty from 1st April. Do you think it would apply in the following scenario?:

- We have a main residence and BTL properties.
- We are looking to move from our main residence.
- We rent out our main residence, so it becomes a BTL, on a BTL mortgage, ie no longer and never again a main residence, so we have no main residence.
- We live in rented accommodation for a time.
- At some point in the future we buy a main residence. Our only main residence.
- Will the additonal 3% apply in this case?

Grateful for your advice.
Kevin Thomson

@Rajesh,

You continue to demonstrate your total ignorance about business and in particular the PRS.

Picking up on one or two pieces of the jigsaw does not give you the whole picture, just a distorted version. I strongly suggest that you thoroughly research this before making more crass statements.

FACT 1: Landlords with no mortgaged properties will pay not a penny more in tax period. By definition this tax only affected those private Landlords with mortgages.
FACT 2: incorporated Landlords mortgaged or not will pay not a penny more in tax. (in fact will pay less tax are corporation tax reduces from 20% to 18% over the next couple of years). By definition this tax only affected those private Landlords with mortgages.
FACT 3: higher rate taxpayers and some basic rate taxpayer who have mortgages will pay more tax - the bigger the mortgage (i.e. the more indebted) the more tax that will be payable. This is simple arithmetic.

If you want facts do your own research, as your clearly do not accept the facts being presented to you on this forum and stop wasting peoples time!!

Every person and every business has benefitted from low inflation, and if they've had loans they have enjoyed low rates as well. Your point is?

But I do applaud your statement : "Landlords can always recoup this cost by increasing the rent. It is always the case in most of the business ventures. I am sure that will happen." This something that George Osborne and HMRC cannot see. BUT most Landlords would rather not have to raise rents as it will cause hardship to their Tenants, and hence our fighting this. You don't see the petrol companies fighting fuel duty rises!

Reply to the comment left by "Rajesh Hiremath" at "29/02/2016 - 14:19":

Let me clarify my position, I have a total of 53 near identical flats in a single building. Half my property (26 flats) is in a limited company which employs local tradesmen and pays 20% corporation tax. It is well managed by the directors of the company, the property is well maintained and all the tenants happy with their reasonably priced accommodation.
The other half of my property (27 flats) is privately owned, does not employ any local tradesmen, pays 45% Income tax and is badly managed by me. It is ill maintained and the tenants discontent in their overpriced property.
Now guess who is the director of the limited company?

Coming back to earth from planet Zarg there is no discrimination between my incorporated and unincorporated properties, they are identically maintained and identically priced. All this is about to change as I have to increase rents to survive, just to pay the extra tax.

And one point you seem to have missed is that the Clause 24 regime will take many basic rate taxpayers into the higher rates. You really should do more homework before posting.

Reply to the comment left by "steve p" at "29/02/2016 - 14:33":

Hi Steve,

I appreciate your points of view. However, it is well known established economic principal that increase in cost over the time is unavoidable. It may be due to inflation, governmental policies or other factors. Portion of the cost is passed on to the consumers and the remaining cost is absorbed by the business. Please note, I am not giving a lesson on Economics. I am only stating the facts. So I expect increase in rent is inevitable in the near the future. There will few winners and few losers.

Hi Kevin I'm no expert but I think u will be stung for extra stamp duty I'm afraid welcome to Alice in wonderland (sorry for the quip)

The crazy thing it we will be charging more rent to maintain income it's is not landlords who are increasing tenants rent it is the government through the back door

Debt should never be taxed end of story

Reply to the comment left by "Rajesh Hiremath" at "29/02/2016 - 13:48":

Good for you. Pay it and go away! You will not convince landlords that will go bankrupt because of a discriminatory tax and that will leave people homeless, that you ability to pay makes all okay. People on here have been very polite suggesting you perhaps don't know what you're talking about and you ought to read from page one. It is clear you have chosen not to do so, and so I shall be frank. You are a protagonist idiot get wise or get off

Reply to the comment left by "Rajesh Hiremath" at "29/02/2016 - 15:04":

Rajesh I am pained to have to say that you do not understand the full implications of clause 24, a new tax regime which, in extremis, can result in an infinite rate of tax. Rates of 150% of profit will be the norm for many otherwise successful landlords and of course drive them into bankruptcy. Some will be forced to live abroad a tax exiles, not just to avoid a little extra tax but to survive. Few have complained about the loss of the 10% furniture allowance for this is an extra tax on profit. Clause 24 is entirely different - a tax on turnover. Please do some homework before you post further to save yourself more embarrassment, there is plenty of advice on this site.

Reply to the comment left by "Markb " at "29/02/2016 - 15:36":

I was trying to be a little more subtle and polite but essentially I agree with you.