Straw Poll to combat further government attacks – Please help

Straw Poll to combat further government attacks – Please help

9:14 AM, 9th October 2018, About 5 years ago 84

Text Size

There is now the possibility of the Government extending its fiscal attack on the PRS, Click Here, by scrapping lettings relief of up to £40,000 and reducing the PPR period from 18 months to 6 months. The supposed quid pro quo being landlord exemptions from paying 50% of their CGT that would otherwise be payable, if they sell to ‘sitting’ [sic] tenants of 3 years’ standing who would also receive the equivalent of 50% of the CGT due as a deposit contribution.

The ‘think tank’ Onward, In its latest report, has proposed this new fiscal attack ‘include’ the two ‘tax relief’ policies, implying this could be extended to include further tax assaults on the sector. The group has previously suggested the complete disallowing of finance costs and even disallowing costs such as that of furnishings in rented houses.  I have previously written about this for an article on Conservativehome titled “The Government’s attack on private landlords is misguided“.

This latest suggestion, which it is rumoured may be announced in the forthcoming Budget, is based on the idea that there are annually 88,000 tenants who would thereby purchase the rented home in which they live. The authors of the report have provided no evidence that this would transpire, other than quoting a survey finding that 9 out of 10 renters would like to own. They then make some dodgy extrapolations.

With the lack of any hard data on this, I am therefore conducting a straw poll and I would be grateful if as many landlords can answer as possible.

When answering, include all properties, even HMOs (however ridiculous this may seem). Please can you answer the 4 points in the comments section below numbering them from 1 to 4 and then give your views on this policy if you have any? We need landlords’ expertise on this as otherwise our voices will not be heard.

  1. What percentage of your current tenants have lived in your property for more than 3 years?

  2. What number of tenant households does this equate to?

  3. What percentage of all of your current tenants (counting a household as one) do you believe would take up this offer to buy the landlord’s property, including meeting mortgage requirements (if a deposit was gifted to them) and wanting to buy the property they rent from you (rather than a different property elsewhere for example)?

  4. What number (of households) does this equate to?

Additionally if you believe your tenant is not able to afford to buy, can you explain why you believe that to be the case?

Please leave your answers below in comments.

Thank you very much for your assistance


Share This Article


Comments

jill skinner

9:59 AM, 10th October 2018, About 5 years ago

1. 100%
2. 8
3. 0%
4. 8
All my tenants are on housing benefits, so not a chance of them ever buying their own home. Why doesn’t the govt start to think about these people rather than trying to help people to buy their homes. All the actions by the govt so far are harming lifetime renters because landlords have little option than to pass on tax cuts to them. I have not put rent up for several years as I have good tenants and want them to stay. But I am now planning to sell up so they will all ultimately lose their homes.

Happy Landlord

9:59 AM, 10th October 2018, About 5 years ago

Hi,
1, 25%
2, 8
3, 1 possibly
4, 0

I don't believe any of my tenants would want, or be in a position to buy. Several older tenants have deliberately moved from their own property to take the worry of maintenance away, several others are not in a position to buy (and would not be able to afford any form of mortgage) and some are short term lets for work placements. Others are simply not interested

R S

10:10 AM, 10th October 2018, About 5 years ago

1) 25%
2) 1
3) 0
4) 0

David Lester

10:15 AM, 10th October 2018, About 5 years ago

At present my wife and I have three properties that qualify: -
1. Our flat, couple have been with us for four and a half years, prior to that 10 years in another flat, only leaving because owner wanted to live in property.
2. A house with a professional family from Spain, if they wanted to buy now the current Capital Gains Tax allowance would cover increase in property value.
3. The third property our original BTL and my parents’ home, we have now owned it for ten years. It is inside the M25 near Heathrow Airport and has increased about £100,000. Since reading the article I have been confused, which I know other readers will enjoy pointing out my ignorance. Currently if the Capital Gains part of the property is £100,000, we would get between us £22,000 allowance, leaving £78,000, CGT @ 28% £21,848, leaving £56,160, plus the relief of £22,000 equals £78,160! So why would we accept £50,000 as the proposal suggests and give our Tenants the same amount? Or have I got it totally wrong?

Gunga Din

10:15 AM, 10th October 2018, About 5 years ago

1) 12.5%,
2) 1 in 8.
3) None. They're students, Polish temporary workers and low income earners.
4) None. The other issue is that mine are flats in converted three storey Victorian terraces so selling a flat introduces various complications.
Of the nearly 50 tenancies I've had, only one tenant, to my knowledge, left to buy a house. This was with her partner, greatly aided by her father. My flats are in a medium sized, post-industrial high unemployment coastal town in the North East.

Cathie

10:28 AM, 10th October 2018, About 5 years ago

1. 85% (or v nearly 3 years)
2. 6
3. 0%
4. 0
2 x HB
1 lets his unencumbered house and lives in the difference between his rent and mine
1 wants a house rather than the flat
1 partner just made redundant and looking to downsize their rental - they are v glad they don’t have a mortgage
1 I think she wants to go back to her home country in a few years

Janet Carnochan

10:41 AM, 10th October 2018, About 5 years ago

1. 33%
2. two
3. 16.65%
4. One

Some of my tenants are in there fifties/sixties so if they haven't bought a house by now are unlikely to do so as a low mortgage term would make the payments unaffordable.. Others even if they could get a mortgage, the value of my houses would be valued at more than they could get a mortgage for so they would have to look in a cheaper area where they don't want to live. Others may be able to afford the mortgage but would not be able to afford the upkeep of the house ie maintenance, a new boiler, new bathroom etc

Dr Rosalind Beck

10:57 AM, 10th October 2018, About 5 years ago

Thanks again everyone and keep the comments coming. Even if you have already posted, I am interested in your thoughts and expertise. One thing I would like the stats on is how many rentals in the UK are in negative equity/have not increased in value; how many have only increased to about the CGT threshold and how many would only be liable for a small amount of CGT. That would cut a whole swathe of properties immediately out of this - even before tenants' inability or lack of desire to purchase were brought into the equation. So the 'carrot' would be largely irrelevant and not taken up on whilst the stick would whack many landlords with one or two properties especially as they get out of the PRS.

David Lester

11:00 AM, 10th October 2018, About 5 years ago

Out of six properties only two would be eligible for Capital Gains Tax if sold today.

Helen Morley

11:09 AM, 10th October 2018, About 5 years ago

Ros, you've just touched open something I've been thinking about. Might the LL have some kind of liability to prove negative equity, i.e. would a survey be required simply to establish gross capital gain, or otherwise ( presumably at the LL' expense!)? My fear is that, if not properly explained, tenants might consider that there is an expectation of equity, meaning some kind of 'right' to a lump sum. Not explaining myself very well...sorry.

And unless I've totally misunderstood, this is effectively the use of funds that currently go to the Treasury, so essentially this is a lump sum kindly donated by the tax payer!

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now