Summer Budget 2015 – Landlords Reactions

Summer Budget 2015 – Landlords Reactions

14:00 PM, 8th July 2015, About 9 years ago 9619

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Budget 2015 - Landlords Reactions

The concern is;

Budget proposals to “restrict finance cost relief to individual landlords”Summer Budget 2015 - Landlords Reactions

To calculate the impact of this policy on your personal finances download this software


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Jack D

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23:01 PM, 16th July 2015, About 9 years ago

This link has some examples how the changes will impact in a few different scenarios.

I think most here now understand how the new calculation will be applied but thought it may be of interest to read.

http://m.accountingweb.co.uk/article/osborne-s-reforms-send-property-spin/584698

Dr Rosalind Beck

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23:23 PM, 16th July 2015, About 9 years ago

Hi Ian.
Sounds good. As appalled landlord (love that name) says, if you do have a short page with some explanatory points on it that you were able to give to Mr Gove that would be a bonus, although it may not be possible.
I'm not trying to be annoying, but I have been tempted to re-work your version, and feel free to adapt any of it, if you want and obviously not use any of it if you don't, as it's your meeting. I've done it like this:
Following the Chancellor's decision to no longer allow private landlords to offset the cost of mortgage interest in our tax returns (whilst continuing to allow those who have a Ltd company to do so) many buy-to-let landlords will end up paying tax on imaginary profits - as the Government has decided money going out of landlords' bank accounts to pay mortgage interest is now 'profit.' Many landlords will face bankruptcy due to this measure with the double tax whammy of CGT hitting them as well and there will be a mass of distressed sales, resulting in thousands of rental homes becoming unavailable. Can Mr Gove ask George Osborne to overturn this decision which is grossly unfair and discriminatory to these small business owners, and if not withdraw, then at least grant an amnesty on SDLT/CGT charging to move to Ltd structures and apply the measures only to purchases subsequent to 2017, to avoid this being retrospective legislation?
If you don't want to use any of my re-draft, can you possibly change the 'or' in your last sentence to 'and'?
The reason for this is that for some of us portfolio landlords with a lot of MX mortgages, we wouldn't be able to move our properties into limited companies until they came to an end, and for some of these, we're talking another 12 years. We'd be ruined way before that...
The best of luck tomorrow. It all helps. And fingers crossed you can have some impact.

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0:09 AM, 17th July 2015, About 9 years ago

Reply to the comment left by "James Tallis" at "16/07/2015 - 20:08":

many Landlords are those FTB who dont release the property on 2nd purchase but keep it and let it out , or even 2 FTB get together as a couple and keep both props and buy a third between them......

Fred Bloggs

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0:14 AM, 17th July 2015, About 9 years ago

Is it not the case that the increase in BTL mortgages has partly been caused by the Govt themselves ? by introducing the pension reforms they must have known that people would use their pension pots to part fund buying properties and therefore taking out BTL mortgages.It would be interesting to know what the percentage of new BTL mortgages taken out are by people using their pension pot as deposits.

british serf

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0:33 AM, 17th July 2015, About 9 years ago

after looking everywhere to find some good examples of how the new tax rules will come into effect i came across these and they seem to be simple and correct

http://www.accountingweb.co.uk/article/osborne-s-reforms-send-property-spin/584698

Appalled Landlord

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0:59 AM, 17th July 2015, About 9 years ago

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

Hi Ian

Maybe you could give Mr Gove this executive summary as well as or instead of our detailed submissions:

Landlords who bought in their own names will pay tax on their interest expense, rather than on real income.

You are changing the rules for people who bought 20 years ago or more.

Rental property is not an investment like gold bars. Being a landlord entails work. They are on call 24/7, 365, to deal with problems. For some it is a full-time job maintaining their properties and dealing with tenants and agents.

Under the proposals, if they make a loss but have a mortgage they will pay tax on the interest.

Under the proposals, if they make a loss but have a mortgage they will pay tax on the interest. If they have no other source of income HMRC, a branch of the government, will make them bankrupt. The result will be divorce,s murder-suicides, and an increased burden on the state. The lenders will lose money.

Landlords who bought in their own names will exit the sector on masse, causing a house price crash.

They will not start companies to buy the new-builds, so fewer homes will be built, fewer sites will be developed, so less affordable housing will be built.

For both reasons the amount of rented accommodation will fall, reducing the mobility of labour both within the country and from outside, and the rents in the remaining properties will rise.

The IFS says the measure is wrong.

Please reconsider.

Jason E

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9:45 AM, 17th July 2015, About 9 years ago

Reply to the comment left by "Mark Shine" at "16/07/2015 - 21:00":

Hi

I can't take into account the loss of the wear and tear allowance as I don't know what other costs you'll incur once that goes so I've left it in as a deducible cost. So with rental income of £215107, £0 other income, finance interest of £81762 and other costs of £61597 ...

Old tax = £71, 748 actual profit, £17,900 tax, take home £53,845

New tax = £71,748 actual profit, £39,378 tax, take home £32,370

I'm not an accountant of course and you should seek professional advice etc etc.

Jason

Dr Rosalind Beck

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10:28 AM, 17th July 2015, About 9 years ago

Hi all.
I have been given an email contact at the DPS and I am writing to a small team within the organisation (specops - short for 'special ops) this afternoon to ask that they circulate the e-petition once it is up and running. Any suggestions on what I should say regarding why it is in the DPS' interests to support us?
Thanks.

Mark Alexander - Founder of Property118

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11:17 AM, 17th July 2015, About 9 years ago

Reply to the comment left by "Mark Shine" at "16/07/2015 - 21:00":

Hello Mark and welcome to Property118

I'm sure one of the accountants here will relish the opportunity to complete the number crunching exercise you have set, if only to prove they can.

It's interesting that you found your way here via the HPC forum, I suspect many others have too.

I made a decision a few weeks ago not to post there any more but to continue lurking. I don't mind people who share different opinions but when they get personally abusive that's where I draw the line I'm afraid.

Nevertheless, it's better to be talked about than not - it's called being "remarkable" LOL
.

Ian Simpson

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11:54 AM, 17th July 2015, About 9 years ago

Right,

We had Ann Milton MP for Guildford this morning, Not Michael Gove as he was busy writing a speech or something!! I gave my question and received this response:
1. Definitely write to your MP
2. Definitely write to George O
3. Keep it clear, short , factual and concise

And then the comment:
"Laws like this are often brought in without exploring the full ramifications or extrapolation, thus forums like these (local business leaders' breakfast) are very valuable to us politicians to gauge feeling and also potential problems with new and proposed legislation. " She then took a written copy of my question and promised to put it on George's Desk, so there you go.

I am certainly going to follow up with emails/letters to him, and also to my local MP, Gerald Howarth and I think all concerned Landlords need to do the same.. I will also be looking out for any petitions which are started by the NLA or others and will be joining in with those.

I do hope that my small effort will help in the war against injustice for landlords

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