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  • Section 24 HQ

    Amateur landlords ruined by tax penalties



    How Britain's £239bn buy-to-let bubble burst: ThisIsMoney's devastating audit shows 'amateur' landlords have been ruined by tax penalties - and lost their pension plans

    • In 2007, around 183,000 buy-to-let mortgages were being approved each year 
    • New figures suggest the number given out in 2018 plunged below 70,000
    • Existing landlords are offloading around 3,800 properties a month

      Retired teacher Margaret Melrose has been a landlord for nearly 40 years. Today, Margaret, 65, owns five properties worth £2.5 million in Greenwich and uses the rent to top up her pension.

      But she says the recent changes and added bureaucracy mean her investment isn't worth it any more, and she plans to sell up: 'It has become draconian.

      There are around 125 pieces of legislation landlords must adhere to. Soon, I will be paying more money in tax than I make.'

      Higher-rate taxpayer Paul Atkinson, 45, says the new rules mean he will barely break even.

      Paul, who lives in Telford with wife Ella, 45, and son Jack, 13, has a two-bed apartment in the town he rents out for £525, and a three-bed house for £575.

      Paul is well versed in the tax changes because he is the director of mortgages at financial advice firm Finance 4 Business.

      He says: 'Over the past few years, the lack of the ability to offset the mortgage interest against the rent has eaten into our profits.

      'We're going to see how the next couple of years goes. But if someone offered us a good price for the properties, we'd probably sell.

      'At best we are breaking even now, but going forward we will have to subsidise the properties.'

      He adds: 'For small landlords like us, there is a lot of work that goes into maintaining the property, meeting regulatory requirements, for very little return.

    https://www.thisismoney.co.uk/money/buyt...burst.html

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Yes we were racing away round the playground having too much fun 

    Then  the  government teachers  eventually spotted us 

    They gave us a spanking for being too adventurous and making more than they did

    But now its all calming down  - they have asserted their authority and its back to lessons

    Fundamentals are still there though  ...Buy a BTL rent it out and wait .

    Make maybe 50% of what you could have made in the good ol days when the teachers were not watching

    But a 50% pay rise is not bad for a bit of overtime and weekend working

    Anyone on 30K likes a 15K pay rise so they can have the opportunity to retire at 55 not 65


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    Jonathan Clarke. http://www.buytoletmk.com


    The trouble is the teachers only run the play ground

    what worries me more is will this school exists in 10 years if Labour win or we get more left wing policy’s from govt

    I’m not sure the govt and the public want our services

    if we are left alone to play quietly in the play ground that will suit me fine and I will hold and ride the storms

    Newcastle city are thinking about a licence for every property in the city with a price tag of £509 per property

    if they get away with this every city will follow up with the same thing

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Liverpool did the same a few years back. £5k gone in the blink of an eye.

    They are very trusting folk though as they have never visited and inspected any on my properties. Not that I even have a problem with that as the ship is in order. (Love the playground analogy)

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    I like the playground thing too

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Nottingham did this 6 months ago. They said there was too much social deprevation and the quality of accommodation was poor. It cost £705 for 5 years and coveres the nice part of Nottingham city centre with predominantly new build flats built in the last decade.

    I have had to fill in a complex form, supply electricty/gas safety certificates, passport, mortgage details. If I failed to provide details I would be classed non compliant and subject to "further action".

    Money grabbers!

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    Welcome the humour Jonathan, but what if you have property which hasn't increased in value, but your £15K rental income is added to your £40K salary and you find you now suddenly paying 40% on most of that £15K?

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    The thinking behind the 50% as good as it was was more for new investors going forward

    They know what rules  they are buying into so adjust structures accordingly to avoid paying too much tax

    New investors would most likely buy in the company and it would be corporation tax @ 19% that applies

    But yes I agree for historic properties  owned it was and is very difficult  for teachers to meter out punishments fairly

    Some will lose more than others as in all tax changes

    But to be fair they did give us ample warning in 2015 they were going to punish us - so time to adjust

    I was hit very bad with s24 but fell back on good CG and high yield and fortuitous timing

    Appreciate some have been caught far worse than others by this blanket punishment

    Some students are seen I guess as teachers pets !

    Not that the government particularly singled out anyone deliberately as far as i can see

    They just had to do something collectively to calm their children  down

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    Jonathan Clarke. http://www.buytoletmk.com


    Yes Corp Tax at 19% plus the costs of removing cash from the Company

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    Your so right the problem is getting the cash out

    JC foucus on CG which is fine but you can’t live on CG in a company

    every investor will pay more tax in a company at some  point

    the only plus is a director can fund a pension

    salary and dividend income is taxed much higher than in your own name

    they have you every way you jump apart from pension

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.