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Been watching the Labour conference;
Mr JC (Jeremy Corbyn) made disparaging comments about those engaged in a rentier economy essentially trotting out the standard stupid Lefty view that only wealth built by manual labour is acceptable and that those profiting from the rentier economy will be made to pay.
Now I'm sure we should all know that the biggest rentier business in the UK is the PRS.
Such rental properties will easily be able to be taxed into oblivion
S24 will be the least of the problems..
Landlords (LL) need to plan for a Labour Govt.
It is clear from the thinly veiled Labour threats that private LL will be effectively destroyed by a new Labour Govt.
CGT (capital gains tax) will definitely be increased.
Now it seems bizarre but the only way to avoid Labour penal taxation of rental property is to sell up and invest in a pension!!
The horrors that Labour would visit on the PRS have already been telegraphed.
Inability to effectively evict
Ability for tenants to sublet
Possibly forcing LL to sell at substantial discount to incumbent tenants.
There are many more I can't think of, but to be a private LL with a Labour Govt will be a recipe for the LL to be robbed of all his capital and income.
All the capital achieved by Southern LL will be robbed by a Labour Govt who have stated that wealth is to be taxed so as to transfer the wealth value to the scroungers of society .
It may make sound business sense to be a fully divested ex-private LL with cash under the proverbial mattress by the time of the next General Election presuming of course the Fixed Term Parliament Act is not disregarded...........................again!
What Labour has planned for the private LL doesn't bear thinking about!
Fortunately I will be out of the game by then.
But other LL staying in will be taking a gamble as to whether it is worth risking what a Labour Govt has promised to do.
Labour intend to tax the private LL until the proverbial pips squeak and certainly make operating rental property extremely costly at the same time as restricting the ability of such LL to manage their business.
Labour is fundamentally against the biggest rentier business in the UK
You have all been warned.
Labour are out to get you!!
Problem is that May and her cabinet would under deliver in term of Brexit and economic performance and most probably the labour would win in an already stagnating/recessive economy, adding further problem with too radical left policies...we will regret Cameron and Osborne, despite S24!
S24 and extra SDLT will be looked back upon with much fondness compared to what Labour has planned for rentier private LL!
Returning to the 70's is the destiny of a JC Labour Govt.
Few LL remember the damage that the rental regulations prior to the HA introducing the AST had on the PRS.
The 70's will return if Labour win, a terrible prospect for tenants.
An annoying one for LL who will just sell up.
I believe many UK LL will start looking at other places in the world where rental investment is worthwhile.
It is clear that Labour intend to tax any 2nd property into the ground..
The big thing not mentioned is Labour will carry out a Council tax revaluation.. This will more than double CT for property owners
I must say that I moved to UK in 2005 and I found the property market and BTL market very attractive for a LL or home owner in general, compared to other EU countries - while now the risk for LL to see worsened the conditions is really huge.
I experienced the BTL market in Italy from the '90 til now via my family that has few flats rented out - and the sector has been so targeted in term of taxation, years to evict a non paying tenant etc etc that most of the property were left empty (BTL is mainly with no mortgage - cash buyer) or rented on the black market with no contract and no tax declared...now to take the sector back in legality the Governament has introduced a flat tax of 20% on rental income, compared to before that was added to total personal income, where my father 73 years old was paying 43% of marginal tax etc etc and with that flat tax empty properties are either back on market or tax declared etc etc while the eviction remain a problem, huge one if someone has a non paying tenant, it may take literally years!
I feel the UK, and certainly Labour/JC will target more and more the sector and there will be distortions and unexpected (negative) consequence for everyone, tenants included - I hope Gov/BOE would be "stress-testing" the sector before the situation get out of hands, considering also the mortgage/leverage and potential loss inflicted to the Banking sector if major correction in property price happen etc etc
Interesting your much travelled experience of BTL markets.
Based on such experience where in the world do you suggest that the BTL tax system is benign and where eviction may be easily achieved if required.
I'm thinking Ireland now that the Govt has realised the folly of S24.
So perhaps Dublin!!?
Is there anything about the Dublin PRS which makes things unviable for a UK LL.
Currency is perhaps a major issue.
I suppose a big issue is for UK LL to be able to raise a Euro mortgage!?
It seems for a UK LL there aren't many places remaining to invest in a property market not subject to penal taxation and problematic eviction issues.
But UK LL will be looking at exiting the UK PRS but will still wish to be invested in a PRS not subject to the stupid UK tax regime.
Being part of a common travel area it would be perfectly acceptable for a UK LL to move to Ireland.
Plus the Irish Govt is now apparently trying to encourage LL by offering various incentives to return to the PRS following the disastrous S24 experiment.
With Ireland no worries about a looney JC being in charge!
This is the very reason I am making provision away from BTL belt and braces is the only way the next election will take me nearly in to retirement and I will welcome my pensions and other investments
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 think worrying about what/whether a Labour Govt. will get in is taking things to an extreme Paul. A lot can happen between now and the next general election and previous voter history doesn't guarantee results for one party in the future.
I admire your optimism
However I would not be prepared to risk everything on there NOT being a Labour Govt.
I would tend to take profits and hide them from prying eyes.
Perhaps retain some properties.
But for those LL with substantial CG I would not wish to risk having that available to be taxed at a penal tax rate far worse than the current rates.
So a Labour Govt would be a sort of S24 on wealth.
I just wouldn't trust Labour.
Remember that Labour in conjunction with the SNP could have easily beaten the Tories into being a minority Govt which just wouldn't have worked.
Only 1000 votes saved 14 Tory marginal seats.
Momentum or rather the Militant Tendency as that is who Momentum are; has magnificently been able to mobilise voters for Labour.
They have been able to create millions of useful idiots to serve the communist party ideology
It will be very easy to target those marginal seats with committed activists.
You can say what you like about Labour; but you have to say they have morphed into a highly effective party machine having fully embraced social media and other technology.
This has left the Tory Party machine look like an embarrassing old fogey.
Labour are promising lots of sweeties to everyone.
They aren't even addressing their old party demographic.
They are attracting those who have no memory of the 70's.
Labour will be coming for those with wealth.
LL are an easy demographic to tax.
Nobody will mourn LL who are taxed of all their profits.
Labour will be the next Govt.
Not even boundary changes will save the Tores.
Labour intend to go on a spending spree that has never before been seen in UK history. .
LL will be paying for a large part of it as it is in property wealth that the majority of UK wealth is held.
You leave it available to be taxed even more at your peril!
Well we'll have to disagree on this one Paul. Even with a pathetic campaign the Tories still just about came out ahead and I don't think they'll be making that same mistake again, although they'll be making plenty of others no doubt!
Yes OK we will
I'd like to agree with your sentiments.
I just wouldn't be prepared to risk my financial future on a Labour Govt.
I personally don't have the time or opportunity to recover from what a Labour Govt could do to my wealth.
I'd rather guarantee jam today rather than leaving things to attain possibly even more jam which then might be all taxed away from me
The thing is Paul, whenever I've tried to second-guess Joe Public and the various Govt.s that have (dis)graced the UK in my time, I've usually got it wrong.Selling up now or even just before, I'd have to be 100% sure I was putting my money into asset class(es) that would do as well, or even nearly as well, and I just can't see anything else out there that can pull in the rewards over X amount of years. I'm not sure of anything else out there that isn't ripe for plucking or has already been plucked. As the UK doesn't make anything any more then taxing is all the Govt. can do to feed its trough.