Summer Budget 2015 – Landlords Reactions

Reply to the comment left by "Vero streetflat" at "18/07/2015 - 19:19":

Vero - I am completely disagree with the introduction of this change but I think it is very useful for a head on challenge of the leverage model being used by many of us.
I fall in the broadly conservative approach at around 40% lending - but I am not being smug because that lending is still a massive 'real' amount and this hits me hard.

This change will make me rethink the whole approach. I am lucky and had already sold a couple and that trend will continue each year now until I have no (or very little) debt. It then leaves me with a modest portfolio and a steady income. Even then I think the ability for the government to change things on political issues (as housing has always been) makes me nervous. I honestly think this will actually get worse......even if it doesn't I will prepare for the worse.

One reason I avoided a bigger pension and went to property was because the goalpost keep changing on pensions. Also I love property.

Things will change and this infact maybe the thin end of the wedge. If I were a limited company invested in residential property I would be concerned too - it would be unthinkable if this changed for those too....but pensions and so many other things have changed.

So as an Appalled Landlord fan and a debt owing landlord I disagree with you. But 'highly leveraged' 'risk taking' 'tax breaks' 'poor owner occupiers' etc is a wave of politics I see going in one way. Wrongly...but politics is less about depth now and more about media relations.

Yes, there are not enough houses....but this makes it look like the government a doing something.

Appreciate the challenge and hope the others guys rip it apart.....but I acknowledge the sentiment.

Reply to the comment left by "Vero streetflat" at "18/07/2015 - 20:28":

Thank you

In reply to your previous posting, regardless of whether equity was taken out or not, and regardless of whether the mortgage has capital repayments, the result of this measure is that the interest that you and I pay will be disallowed in 2020/21 just because the properties are in our own names. I cannot be as relaxed as you about this.

Reply to the comment left by "Appalled Landlord" at "18/07/2015 - 21:32":

My biggest issue remains the methodology of the tax calculation - more so than the extra tax. Ie simple higher rate or an inability to deduct all interest is unfair but avoids all the odd impacts of tax on trading losses, BRTs becoming HRTs etc.

In answer to you point re differing treatment of Ltd Co's vs sole traders - I see that changing. . And all Ltd Co's who are exclusively holding residential properties getting captured too in another change to 'make things more balanced'. Nothing will surprise me.

Neither can I. I'm sending out letters left, right and centre. We have to get it overturned. It's wrong on so many fronts - it's robbery by the State. Where on earth in the world do you get taxed on a non-income/non-profit? Oh, yeah. let's chill out. I explained it to my mother who is on a state pension. 'Imagine, Mum, your income is zero, but the Government insists you pay them £40,000 a year, until everything you've got is gone.' I've told quite a few lay people and they all get it straight away - everyone can see the madness and injustice of it. And if there are any who say they can't *because they don't want to - the likes of Shelter etc), if they got stung with the same crime against them, they'd suddenly completely understand. Personally, I don't have to have something happen to me, to empathise with it, but some people lack that imagination.

Reply to the comment left by "kathleen drea" at "17/07/2015 - 15:35":

No.1 is incorrect.

Reply to the comment left by "Vero streetflat" at "18/07/2015 - 19:19":

My capital repayment mortgages have never been tax deductible –

Landlords with capital repayment mortgages should only be mildly affected.

The interest element of a repayment mortgage is tax deductible. This is common knowledge for people renting out property.
Are you a landlord?

Reply to the comment left by "Monty Bodkin" at "19/07/2015 - 09:41":

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Reply to the comment left by "Monty Bodkin" at "19/07/2015 - 09:41":
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My capital repayment mortgages have never been tax deductible –
Landlords with capital repayment mortgages should only be mildly affected.

The interest element of a repayment mortgage is tax deductible. This is common knowledge for people renting out property.
Are you a landlord?
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To clarify, in case of confusion, I was of course referring to the capital repayment part of my capital repayment mortgage. This is not tax deductible.

Reply to the comment left by "Vero streetflat" at "19/07/2015 - 09:48":

To clarify, in case of confusion, I was of course referring to the capital repayment part of my capital repayment mortgage. This is not tax deductible.

So why would landlords with capital repayment mortgages only be mildly affected? Their situation is entirely dependent on the amount of interest payable not the type of mortgage.
Asking again, are you a landlord?

Yes, Monty. I used to have a combination of interest only and capital repayment mortgages, but for years now have only had interest-only ones. The capital issue is irrelevant - it doesn't affect the interest payments (apart from them going down a bit each year - but if you are heavily-geared you still pay a stack of interest).
Some people seem to want to insult those of us who have expanded our businesses and managed to run larger businesses, notwithstanding all the work and stress involved. And as I pointed out in my second letter to Osborne et al, the Government in its Manifesto ostensibly supported the expansion of businesses. (This measure will kill expansion in BTL completely - even if it is not retrogressively applied )
On a personal note,I have saved while interest rates have been low and have a few years reserves and have always had a model whereby I can manage if interest payments go up to 5% or so - just as I managed when they were at that point. I wouldn't say I'd been reckless and now deserved to fail because I somehow didn't prepare enough and/or was greedy.
The Government has proposed a measure which punishes us in fact - a measure influenced by groups who have campaigned against us as somehow greedy capitalists. How can the Government accept that, act on it and then have a whole tranche of 'business' ministers? The whole issue is riddled with contradictions.

Just had a brainwave.
Does anyone know an MP who would be willing to ask a question about this at PM Questions?