I received a newsletter today from Mortgages for Business, with an article about the new regulations to protect “accidental” landlords taking out BTL mortgages. Sounds as if it will just make it more difficult for ordinary people to invest in just one property towards their pension or to help them move house if they can’t sell. Nevertheless, the definition below should raise a laugh.
Business buy to let definition according to the HM Treasury:
“For the majority of buy-to-let transactions, the borrower is making an active decision to become a landlord, an activity for which they will receive an income and for which they will be taxed as a business.
In addition, they will have to comply with a number of legal obligations placed on landlords, for example around fire and electrical safety standards and the use of a government-backed tenancy deposit scheme.
In the government’s view these are characteristics of a business rather than a consumer activity and therefore do not propose such borrowers need to be covered by an appropriate framework under the MCD.”
So we are a business, yet no longer to be taxed as any other business. This definition also implies that landlords of only one property are exempt from the onerous regulations imposed on “professional” landlords, which of course is also false. I wonder how they propose to treat the accidental landlords for tax purposes?