Summer Budget 2015 – Landlords Reactions

Reply to the comment left by “Paul Fay” at “30/09/2015 – 00:25“:

Hi Paul

This would not work as the mortgage would have to be in the landlord’s name. Getting the tenant to pay directly to the mortgage company is just getting the tenant to settle a debt of the landlord.

Presumably your landlord would want the tenant to pay him a bit extra on top of the mortgage payment and this would be described as rent. How would the tenant feel if the extra bit on top was larger than the amount paid to the mortgage company. Would he be happy?

Unfortunately it does not get around the problem from a tax point of view and would be unworkable practicably.

Following the lead of a local landlord, I’m about to start putting my rents up subject to the final draft of the bill. First time ever during a tenancy as they are all good tenants at the moment.
In my cover letter I was going to polity explain the reasons behind it, basically the tax on turn over. Without a long winded, emotionally driven speal, does anyone have some good wording in layman’s terms to get the point across that its not landlords being greedy, its simply preparing for the tax hikes.

Got to be done though as in the time that for instance one property was was let it was fetching £675/m now similar properties on the same street are achieving £850/m. After all, I’ve been the nice guy too long, now the government are forcing my hand, so its time to look after my interests alone.

Reply to the comment left by “David Price” at “30/09/2015 – 09:33“:

It’s a stunning island….your 25k will go a long way there!

Reply to the comment left by “Trendo ” at “30/09/2015 – 10:07“:

>Trendo

thanks for the clarification

how much do you expect to increase the rent as a result of the budget changes?

is the current tenancy with a HB tenant?

how confident are you of finding non HB tenants for that property at the elevated rent?

these are all questions going round in my mind

I am also interested in your thoughts on Basel III

Sorry Jon , hit rtn in error before i had finished my post!

Could they move to a similar property on lower rent – as stated above – Yes if they can find a charitable LL who is prepared to heavily subsidise rents.

I am not charging “TAT” any more than in my other business life where i “charge” “VAT” on behalf of HMRC. I am just the unpaid tax collector working on behalf of HMRC that collects VAT & TAT

All i have done is break down where the RENT money gets allocated, just the same as we are all aware that fags, alcohol and petrol prices costs components are large VAT, DUTY etc so is property rent

I welcome “Straight talking – Honest politics” and will be assisting in propagating this message. I will be advertising some of the cheapest rents in the country ie for a room in a house share including all bills in a major city, the rent will be 227pcm +TAT(54%) = £350

I am happy to educate my tenants and anyone else of how this new tax proposal will effectively work and demostrate just how caring and fair the new tax is/will be.

The coservatives came with their shovel , labor, it appears, want to bring a JCB.

and to address your last question:
“Would you feel any need to justify charging the TAT now when the full impact doesn’t hit you until 2020?”

When a large expense is to be covered – i think it is prudent to mitigate costs at the first available opportunity – what would i know about running a business tho , i am just a nieve armchair investor !!!

This has focussed my thoughts and plans considerably tho, and there is potential for me to be considerably better off thru restructuring my affairs, being a lot firmer with rent levels, maxing out props, not being quite as charitable to my tenants (many of whom are good friends of mine) and stop being an “investor” and run it with a much harder business nose.

Every cloud has a silver lining !

McDonnell is threatening to take away 13 Billion £’s worth of so-called Tax breaks whether Landlords repair their properties or not!

He is also threatening to reverse Tories Inheritance Tax Threshold and thinking of Taxing additional rate tax payers at 80%

It seems as if, educating our children will prove somewhat fruitless if he wants to equalise everyone by TAXING those who have worked hard and educated themselves and wants to bring every Tom Dick & Harry in same category. (Doing well in your life will soon be Criminal).

Read this:
http://www.dailymail.co.uk/news/article-3252774/Corbyn-s-class-warrior-Marxist-shadow-chancellor-McDonnell-target-booming-businesses-buy-let-landlords.html

Mr McDonnell is also consulting on plans for a punishing 7p rise in national insurance payments for those earning more than £50,000 a year.

Reply to the comment left by “Jon Pipllman” at “30/09/2015 – 10:56“:

how much do you expect to increase the rent as a result of the budget changes?
Maybe this question would be better directed to GO ? i am effectively DECREASING my rents , it is GO who is increasing the TAT , clearly there are limitiations to this – 1. when there are not enough tenants with the means to pay it & 2. when a LL cannot continue because the model is no longer financially viable – both determined by the TAT level on each property, which is dependant on LL borrowings.

is the current tenancy with a HB tenant?
I have “several” current tenancies ranging from 1/2 beds right thru to large hmos, so this question is not relevant ! But as a rule no not many at the moment and soon to be none.

how confident are you of finding non HB tenants for that property at the elevated rent?
Very

these are all questions going round in my mind

I am also interested in your thoughts on Basel III
He has a bushy tale !

So you are going to take the hit on the extra costs – i.e. not putting the rents up to compensate for the larger tax liability?

On a more serious note, if that is the only thought you have on Basel III, then there isn’t much to lose by reading up on it. Even for LLs with no debt, understanding it might influence the timings of future purchases.

Reply to the comment left by “Saeef Khan” at “30/09/2015 – 11:51“:

why bother to work if you are going to be taxed at 80% but then that is peanuts to what BTL landlords are going to be taxed at from 2017

Yet people will be shouting from the roof tops about this tax but are saying very little about a possible 200% plus tax. Crazy mad world