Proposal to make BTL a time limited offer – Feedback request

by Dr Rosalind Beck

11:26 AM, 16th October 2018
About a month ago

Proposal to make BTL a time limited offer – Feedback request

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Proposal to make BTL a time limited offer – Feedback request

Once more I am after landlords’ views – this time about a proposal put forward by the Centre for Policy Studies. In a nutshell it is this:

‘What we propose, therefore, is that the Government should make every buy-to-let landlord in the country a time-limited offer. For one year, if they sell up, they will get a CGT rebate worth 33% of the tax they would have paid, plus (in the case of those with only one property) a cash bonus of £3,000. The buyer will get the remainder of the rebate, as the core of a deposit – up to 6.66% of the value of the property, with them having to put in the remainder. (This is, emblematically, similar to the discount on the original Right to Buy.)’

To view the full article in Conservativehome please Click Here

I am looking for you to answer the following questions, numbered as I have them numbered, in the comments section below and to also give any views you have on this.

I have already used the data collected from yourselves last week “Straw Poll to combat further government attacks – Please help” click here which should be published in an article next week. I will let you all know when it appears so that you can see how useful your help has been. So if you can help once more, that would be great.

Questions:

  1. If this policy came in for the tax year 2020-21 would you be willing to sell any property (assuming you could get a buyer) under this scheme? (yes/no)
  2. How many properties would you sell?
  3. What do you estimate the capital gains tax liability would be? In the case of more than one property, give the average for one property (if you are a higher rate taxpayer this will be 28% of the gain – to make it easy use the total gain from purchase price to sales value, ignoring allowances etc. so if you bought it for £100,000 and the sales value is £200,000, the amount of CGT due would be £28,000)
  4. If you would sell, would it be likely that your current tenant would be the purchaser?
  5. If you would not sell, why not?
  6. What do you think about the idea (you may want to read the whole linked article before answering)?

Thanks very much for your help.



Comments

Simon Hall

11:48 AM, 16th October 2018
About a month ago

I already see a problem with "Time Limited Offer" Tax reduction of 33% in other words 1/3rd. This will inevitably could result in mass exodus of Landlords who will rush to off load properties due to "limited time". This could flood market which would consequently result drop in house prices. This would then negate aforementioned carrot offered by government.

AJ

12:34 PM, 16th October 2018
About a month ago

I can’t see any positives
All that would happen is lots ofhouses on the market, so this would drive the prices down. There are people that rent that either do want to buy a house or can’t buy a house, so where do they go? Increased homelessness, so a higher cost on councils and we know where that money is coming from.

What about the bank, who make a few extra percent on a buy to let mortgage, they are going to want to get that back, so increased mortgage rates, making it harder for people to buy.

Realistically, we live on an island, with a growing population, we either start building on the green belt (not a good idea as it provides oxygen) or we build more apartments or somehow control population growth.

There is no easy fix

LANDLORD 35

20:04 PM, 16th October 2018
About a month ago

Will the scheme be available to the tenants of private letting companies which many local authorities have set up?
The article states that there will be "no loss to the treasury due to the fall in housing benefit as people make the transition from renting to owning".
What planet are the authors of this article on? If they couldn't afford the rent without housing benefit how will they afford the mortgage?
"The tenant must be given first refusal". And if they don't want to buy they are given a section 21 and it is re let to a tenant who dose want to buy.
"The property must remain in owner occupation for 10 years"
What if the mortgage company has to foreclose, within the ten years, can they only sell it to an owner occupier and not a landlord?

David Lester

8:57 AM, 17th October 2018
About a month ago

1. No
2. None
3. N/A
4. No
5. Better off with current tax
6. Why should we give our money to Tenants?

Rennie

9:04 AM, 17th October 2018
About a month ago

1. I wouldn't be prepared to sell under this scheme as the benefits would be absolutely negligible.
2. 2
3. I am unlikely to be paying more than £500 CGT
4. One of them might.

5. If things get better in general for landlords or if my tenant stayed long term and looked after the property I wouldn't sell. I bought with the intention to provide an income in retirement.
6. It is just a puff of smoke! If tenants want to buy houses (any houses) they will! The reason they can't buy them is because they can't get the deposit together or they can't get a mortgage. So! Education for them so they realise they can't have a £50-£90per month TV contract AND own their own home - it doesn't work like that. Education so they know that owning a home involves a responsibility to maintain and protect it otherwise it will just go to wrack and ruin. Also, relax these ridiculous qualifications for getting a mortgage. Everyone knows that a lot of people can actually afford to pay a mortgage but no-one will give them one (I come into this category as I don't have my own home but they would give me mortgages for as many buy-to-lets as I wanted).

So some people will buy a house and then lose it for various reasons, some their fault and some not. A NANNY STATE CANNOT PROTECT THEM FROM THIS.

David Nic

9:09 AM, 17th October 2018
About a month ago

So if the landlord wants to sell but the tenant doesn't want to buy then does the landlord evict the tenant so he can sell...no sense to me...
There are lots of rented properties for sale right now that only other investors may buy as 1st time buyers are heading for help to buy scheme. So open help to buy scheme to all properties not just new builds.
That will be financed by landlords paying the full capital gains tax when they sell.

Robert Taylor

9:18 AM, 17th October 2018
About a month ago

I agree with all of the comments above. This scheme is not thought out and would not solve any problems.
Some accidental landlords would be encouraged to sell but if it resulted in mass selling of rental properties, the knock on effect would drive down prices and unstabilise the market.

Clint

9:29 AM, 17th October 2018
About a month ago

Sorry. I agree the market would be flooded and this just would not work as property prices would plummet.

Dino

9:38 AM, 17th October 2018
About a month ago

I think it's an excellent idea - it would encourage lots of landlords to sell up, thus reducing the competition, meaning less voids for me and potentially higher rents going forwards, plus it would cause a dip in house prices now with less first time buyers about, so I'd have less competition for the houses I'm trying to buy.
Not entirely sure that's what the think tank intended...

Dr Rosalind Beck

10:02 AM, 17th October 2018
About a month ago

Thank you for comments so far and please keep them coming. I will post what I see as the problems with the CPS report next week and may use some of your arguments as well.

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