X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Buy-to-Let

    Can there be any more tax?

    After discussing with some relatives investing in properties overseas and they were shocked at our tax treatment investing in property in the UK. Tax going in, running it and coming out, the government covered all taxable route and apparently will be intensifying it during autumn statement.

    Entering/Purchasing- Extra SDLT

    Running it- S24

    Exiting/Selling- extra CGT / inheritancd tax

    The question is, can we actually be taxed any more?

    1
    0

    Of course. Residential rental could be standard rated  for vat.

    Full removal of any interest rate relief Etc etc. 

    I always find international comparisons on tax misleading. Some places might allow interest rate relief but have rental controls, or have agreements where effectively the tenant gains from the uplift in the value of the freehold etc etc. Very hard to compare apples and oranges.


    0
    0

    Agree with your relatives and to answer your question - sadly yes we can be taxed more. Depending on how things go politically, possibilities could include - further increases in stamp duty, rent controls, increases in corporation tax for those going down the limited company route, increased demands on landlords around EPCs, electrical checks, etc and further tightening of the tax treatment on mortgages.

    None of this unfortunately is beyond the realm of possibility given the current climate and statements made by both main political parties. What is terribly short sighted is this seems to be part of a general attack on landlords rather than a well thought out housing strategy which should have a place for all housing models including rental.

    0
    0

    Taking all taxes together, the UK already has amongst the highest property taxes anywhere in the world. And yes, the tax can easily be increased still further:


    Purchase SDLT - just increase the tax rate still further on all houses not intended for owner-occupation. If you link it to the EPC rating, so low-rated properties pay more SDLT, and you could even increase SDLT on owner-occupied houses too (the "green" label helps detoxify the tax increase).


    Running it - S24 can easily be made worse. Once you've established the principle that landlords cannot deduct their mortgage interest in full, why not just carry on and progressively remove the tax deduction entirely? The taxman could also extend this to other costs too, like repairs and maintenance: none of it would be tax-deductible, as rental properties aren't really businesses, are they: they're "investments".

      - you've forgotten to mention council tax - this can be made more burdensome by requiring landlords, not tenants, to pay it, and by charging a higher rate on rental properties too.

         - taxes on ownership could also be increased by requiring landlords to pay business rates rather than council tax. This is the big reward for central and local government once they've forced every landlord to be registered and licensed: once they know who we are, they can tax us. So why not charge business rates on rental properties: they've businesses, aren't they (except when they're investments)?

        - taxes on ownership can be increased still further by introducing a Land Value Tax. This is a tax on land ownership, on top of council tax or business rates on buildings. Anyone with a big garden will be punished, as will all small builders and developers who own land for new housebuilding: they will pay tax simply by virtue of owning a piece of land, whether or not there's any prospect of using it for something productive. All the signs are that Old Labour is highly likely to introduce a LVT if it forms a government.


    Selling: there's nothing to stop the Government imposing SDLT on sellers as well as buyers, especially if you restrict it just to people selling a second property: you'll be seen to be taxing second home owners, landlords, builders and developers, who are all easy targets. As before, SDLT could also be imposed on owner-occupier houses, especially if you tie it to their EPC value.

       - the big move would be to remove the tax exemption for owner-occupiers, so they pay capital gains tax too, as they used to do before 1963 or so. This exemption is an absolutely enormous tax break for homeowners, so just think of all the extra tax that could be raised to spend on new social housing and forcing everyone to upgrade the energy efficiency of their houses!


    0
    0

    Govt will continue to attack the PRS because it knows the determination of LL to hang on in there.

    LL are extremely reluctant to exit the industry or reduce their exposure to it.

    Govt knows it can therefore continue to further tax LL.

    The tipping point to persuade LL to get out has not yet been reached.

    Govt knows it has plenty more headroom to tax.

    I do wonder whether many LL have worked out what their personal tipping point is.

    I am not even sure it is possible taking into account every LL has different personal domestic circumstances.

    But I'm sure someone could come up with a very general take on where an average tipping point might be.

    So a LL with £200 profit per month might accept £50 per month

    That gives Govt £150 extra tax per property across 9 million tenancies.

    I doubt anyone has done a tipping point calculation apart from IR stress tests.

    Surely the direction of travel will be recognised by lenders.

    So they will start to factor in other projections of where they think Govt taxation will go.

    This will result in far lower mortgage offers

    Reduced mortgage credit availability can only lead to one thing........reducing property prices!!

     Not forgetting of course rents will be rising as stock reduces.

    0
    0

    Just reading the above comments

    a couple of years ago Paul and myself were shot down when ever we commented on the taxation of the PRS

    our views were not what others wished to hear

    and we were loan wolves in the forest of BTL

    I notice more and more landlords are seeing what we saw

    I was wrong for investing in other sectors because BTL was best

    I don’t take any pleasure for prediction I made then but I stick by my views

    its just re assuring to see landlords takeing action one way or another

    a lot of what I call bold as brass landlords and Property sources have gone quite

    as the real realities of being a landlord in 2018 is hitting home

    1
    1

    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.


    I doubt it, Corbyn is now poison and unelectable, may is being allowed to stay in to take the fire Iver brexit, won't be long till Boris and some real conservatives take power and create the low tax economy that will pull us out of the doldrums. Or believe the naysayers who hate this country...

    0
    0

    Agreed a low tax economy like Singapore

    Force all the welfare scroungers to do all the jobs immigrants do.

    Then no unemployed.

    More austerity required.

    The State can no longer afford to pay for nice things.

    Just the basics need to be provided.


    0
    0

    Most of which can be mitigated through the choices we make!

    0
    0

    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer