Landlords are selling up because of ridiculous tax policies that are bleeding us dry!

Landlords are selling up because of ridiculous tax policies that are bleeding us dry!

0:02 AM, 24th February 2023, About A year ago 15

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Hello, How long does the government think this situation is sustainable for? Squeezing landlords dry with increased taxes and high BTL mortgage interest rates!

I have personally, for the past 4 years, accepted that I was only just breaking even with my 2 rental properties… then with the change in tax rules meaning I paid 40% tax on my total rental income (instead of 20%) regardless of my monthly mortgage expenditure, I ended up topping up my tenants’ rent by £100-£200 per month after paying my tax bill!

And even then, I accepted the situation… believing that long term I would still be better off keeping the investment.

Then the Bank of England base rates started to climb… and then a shift in UK Prime Minster from Boris to Liz, sky rocketed mortgage interest rates into seriously unsettling figures!

My interest only fixed rate is ending in October and my circa £1,000 per month mortgage payment will be turning into circa £4,000 per month!!!

With rental income of circa £3,500 I will already have to chip in £500 per month to cover the deficit to meet my monthly payment.

But then there is the 40% tax bill on the the rental income… despite the fact that the rent does not even fully cover the mortgage!

Is it just me?? Or does anyone else see the ludicrously unbalanced situation landlords are facing?

Perhaps my circumstances are unique… but coupled together with all the other cost of living crisis conditions, messy tenants causing repair work, tougher eviction policies making landlords more vulnerable to financial loss, and tougher capital gains tax rules… I really cannot see how the BTL market can carry on like this unless the government and banks step in to reduce steep BTL mortgage rates and reintroduce more favourable taxation policies on rental income!

Lisa

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Comments

Jon Williams

21:48 PM, 25th February 2023, About A year ago

Reply to the comment left by shaun carter at 25/02/2023 - 20:15
Totally with you and while you're at it take on Council's and Devolved Governments for 300% Council Tax surcharges.

SimonP

22:46 PM, 25th February 2023, About A year ago

Reply to the comment left by Ed Duncan at 25/02/2023 - 10:49
. . . probably because s24 will only affect those not paying more than the 20% tax rate.

Merlin

8:26 AM, 26th February 2023, About A year ago

In terms of taxation can someone explain why individual owners with mortgages are subject to section 24 and yet limited companies are not - that in itself seems discrimatory. Its not always straight forward to switch depending on your circumstances.

Azad Peshderi

16:28 PM, 26th February 2023, About A year ago

Reply to the comment left by SimonP at 24/02/2023 - 18:24
Maybe this is the missing piece of the puzzle, which is PENSION.
The government realised that people stopped paying into pension schemes and switched to properties as an alternative.

Grumpy Doug

20:50 PM, 26th February 2023, About A year ago

Reply to the comment left by Merlin at 26/02/2023 - 08:26
You will find that this has been debated endlessly for the last 7 years ever since Osborne announced S24 in 2015. Every landlord website and forum will have thousands upon thousands of posts about it

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