Summer Budget 2015 – Landlords Reactions

Reply to the comment left by “Appalled Landlord” at “11/08/2015 – 09:55“:

You are quite right that it is 5/11 for 45% tax payer.
I had hard-coded for 40% tax in one cell on my spreadsheet (rookie error).

I agree that your approach to calculating required increase is accurate in most cases where a new tax band is entered, but I was trying to give a simple ‘rule of thumb’.

I believe that your calculation does not take into account the cases where the extra income pushes one into the 45% band or into the “lose personal allowance” region (and as that is too much for my little brain, I am not even going to try!).

Reply to the comment left by “New BTL’er” at “11/08/2015 – 09:25“:

Hi New BTL’er

Is your loan from Paragon, by any chance? Its chief executive Nigel Terrington is quoted in:

http://www.sharesmagazine.co.uk/news/paragons-buy-to-let-booming-despite-budget#.Vcm9unFVikp

“But proposed reductions in tax reliefs for buy-to-let borrowers should not impact the business too much.”

So in public he doesn’t think that a levy on the annual finance costs of up to 25% will put anybody off taking out a loan from Paragon to buy a property in his own name, or else he thinks that people will start companies to buy them.

Would you start a company to buy another property?

Reply to the comment left by “Michael Barnes” at “11/08/2015 – 10:26“:

Hi Michael

Don’t worry, the downloadable spreadsheet takes account of all the tax bands, and the loss of personal allowance. There is no strain on the brain!

Reply to the comment left by “John McKay” at “11/08/2015 – 09:28“:

Thats great John

The day after the Budget I phoned 2 big players on the buy to let mortgage sector and asked what their views were . Would they now be bringing out more company rates etc..

I was informed that nothing had been said regards the budget and they were still providing plenty of buy to let loans to landlords!

I was expecting out cry from this sector, very slow off the ground.

Reply to the comment left by “Appalled Landlord” at “11/08/2015 – 10:28“:

No, it’s not Paragon. The loan is not really the issue for me as I’m not highly leveraged. I will still make money but the point is most of it will now go to the taxman. I suppose I could transfer to a ltd company and purchase new ones through it but I don’t really want to go down this route. Nor do I trust that the situation for Ltd companies will remain the same, look at the new dividend withdrawal rules in the last budget.

I think this budget will wipe out the highly leveraged, marginally profitable portfolio landlords. And I also believe this move by Osborne is political rather than economic, he ‘s got one eye on the next election and winning over the Generation Rent cohort. So I don’t believe petitions or protests will work, they have targeted this sector for good.

All we can do is adapt or die.

Reply to the comment left by “New BTL’er” at “11/08/2015 – 10:49“:

Generation Rent (whoever they are) will still be renting (but what?) as they will all be on zero hours contracts, or fixed term contracts and unable to get mortgages. Or they’ll prefer a good night out and Sky TV to a deposit. Will they be disillusioned? Who can tell? Quite honestly, getting all your repairs and redecoration done for you, with no hassle if you need to move, looks like a good deal.

Reply to the comment left by “New BTL’er” at “11/08/2015 – 10:49“:

He wont win the election if the country does back into recession due to a housing market crash.

Reply to the comment left by “New BTL’er” at “11/08/2015 – 10:49“:

Hi New BTL’er

In the light of your reply, Paragon should be very worried indeed.

I don’t think many of us would say that we will still be making money if 2/3 of the profit goes in tax. Will you not pass the extra tax on to the tenants by increasing the rent ?

I contacted a friend, neighbour, and town Mayor today (all the same person) in regards to the issues we, and our tenants face. This gentleman also runs the local community radio station with listener numbers around 21k I think.

I’m going in sometime soon to be interviewed on air about what the tax changes mean, the petition and saynotogeorge.

Does anyone know anybody in local rags that would like to take up the story too? Great one for their property pages.