Summer Budget 2015 – Landlords Reactions

Summer Budget 2015 – Landlords Reactions

14:00 PM, 8th July 2015, About 7 years ago 9619

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Budget 2015 - Landlords Reactions

The concern is;

Budget proposals to “restrict finance cost relief to individual landlords”Summer Budget 2015 - Landlords Reactions

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19:21 PM, 8th July 2015, About 7 years ago

'The ability to deduct these costs puts investing in a rental property at an advantage. Tax relief for finance costs is particularly beneficial for wealthier landlords with larger incomes, as every £1 of finance cost they incur allows them to pay 40p or 45p less tax.'

George Osborne said he wanted to support homeownership but 'act in a proportionate and gradual way.'

However, one expert warns some investors could now struggle to turn a profit. Phil Nicklin, from Deloitte, said: 'This measure will almost double the effective cost of borrowing for a taxpayer on the highest rate of tax.

'Currently interest payments of £100 only cost £55 after tax relief, but will cost £80 from 2020. A landlord who borrows at even a modest level might end up paying more in tax than he makes in profit. ....basically higher rate tax tax payers will have to stump up 20-25% of annual mortgage payments in the form of more tax the knock on effect of profit increase from removal of 10 % wear & tear allowance. .... so the most expensive business expense is no longer a legitimate expense it seems!! Rents will rise that reallt doesnt help inthe long run does it George ?

Monty Bodkin

19:25 PM, 8th July 2015, About 7 years ago

Reply to the comment left by "Romain Garcin" at "08/07/2015 - 19:03":

Now, perhaps they mean that if I get £1000 in rent I should pay £200 or £400 in tax. But I can the £1000 I paid in interests so I ‘save’ (is that the so-called ‘tax-relief’) these £200 or £400.
So if they want landlords in the 40% tax bracket to only save £200 it could mean that, in effect, those landlords will now only be able to claim HALF of the interests paid as allowable expense.

I think what your understanding is correct Romain but this is very early days.

As you imply, it is not a 'save', 'tax-relief' or even a 'tax perk', it is a cost of doing business.

Romain Garcin

19:26 PM, 8th July 2015, About 7 years ago

Reply to the comment left by "Mark Alexander" at "08/07/2015 - 19:14":

Yeah, just needed a bit of time to understand the government/HMRC's position, which seems to be to tax any money that reaches you unless they are nice enough not to.

Seeing things that way I can understand why they talk about 'tax-relief'!

Glad that we elected the 'pro-business' guys.

Neil Patterson View Profile

19:27 PM, 8th July 2015, About 7 years ago

Landlords are a particularly easy political target to raise money from

If you ever read an article about landlords in the Daily Mail you will instantly see hundreds of derisory comments from the public about rich fat cats.

There may be 1.5 million landlords but there are 70 million voters that are not.

Joe Bloggs

19:32 PM, 8th July 2015, About 7 years ago

Reply to the comment left by "Neil Patterson" at "08/07/2015 - 19:27":

and who are landlords going to vote for instead of tories..........?!?

Dan Smith

19:34 PM, 8th July 2015, About 7 years ago


The articles have stated numerous times today:

'from April 2017 landlords will no longer be able to claim tax reliefs worth 40% or 45% of the interest payments on their buy-to-let mortgages'

Is this correct as this is where I'm getting mixed up - this 40% and 45% should be written 100% as pre budget regardless of what rate taxpayer you could offset all of the mortgage interest against income right?

Neil Patterson View Profile

19:34 PM, 8th July 2015, About 7 years ago

Interestingly the big home builders instantly took a hit on their share prices.

This proves that the financial market thinks less homes will be built rather than freeing up the housing market.


19:38 PM, 8th July 2015, About 7 years ago

For those referring to the 10% wear and tear allowance - this is only allowable for fully furnished properties (including beds. suite, wardrobes, tables etc.). Until now the provision of white goods has not made a property furnished as it is generally an expectation that these are provided.

From April 2013 these are not allowable against tax so now other furnishings are allowable at cost but not appliances? Doesn't make sense.

Seems that there is a likely outcome that properties will more often be offered unfurnished and without white goods. This does suit some tenants who prefer to have their own belongings but a number also prefer to have these provided as it increases their costs - to provide them and also to do repairs when necessary which currently the LL does..

Mark Alexander - Founder of Property118 View Profile

19:39 PM, 8th July 2015, About 7 years ago

I can but wonder how this decision came about.

I reckon the political discussions went something along these lines .........

Chancellor - Where can we raise another £1 billion a year in tax?

MP - What about landlords, they are the biggest beneficiaries of the ultra low interest rates

Chancellor - But what about when rates go back up?

MP - Well let's be honest with each other, that's not likely for a very long time!

Chancellor - OK, fair enough, and the BoE are concerned that £200 billion has been lent to landlords too.

Many MP's - Yes agreed, but we are a conservative government, surely we can't tax the rich can we?

Chancellor - Ah but what about if we phase it in gradually by gently reducing the tax breaks in BTL mortgage interest like the loony lefties have been suggesting. The difference is that we will only go half way max, surely the landlords will still vote for us at the next election on that basis?

More MP's - Yes that makes sense, they'd have been much worse off if the lefties had got in because they are nothing more that a puppet for the likes of Shelter and the House Price Crash idiots when it comes to landlords are they?

PM and Chancellor - OK, agreed?

Most MP's who are not Landlords - Agreed!

19:47 PM, 8th July 2015, About 7 years ago

Today George,

....You took a fundamental basic premiss :

Business profit = Income - Running costs

And you destroyed it, along with any trust or credibility that you had.

BTL mortgage interest costs are a straight forward cost of running a business, as is rent , rates etc

This is now a tax on money spent , not a tax on profit.

This is past ridiculous.

This needs undoing and quickly - have you lost your mind ? ... let him know what you think.

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