Buy To Let - New Tax Grab

Loss making venture? Are you serious, you can gain over £4,000 per year rent free from a room or property. Above that you pay nominal tax & with regard to the disgustingly amusing 'loss making venture' many a millionaire happens to be investing funds into those same phrased 'farms or film ventures' that make no profit so are used as a tax deductable. I was a landlord for over ten-years & there are many unscupulous loop holes for funneling earnings away on wear&tear un-vented (no reciepts needed) upgrades & maintance schemes.

So as a landlord you cover the cost of the mortgage & make a nice little profit...and this isn't enough? Whilst the cost of the value of the property sky-rockets further & further out of the grasp of poor peoples goals. Forever leaving the disenchanted (i am now one of them) plebs picking up the comfortable crumbs of been able to live with a roof over our heads but never actually achieving a righteous stance of ownership.

I don't wish to poo poo peoples earnings but this vulture society whereby government is sum what seen to be lurching to grab money. Versus those 'cleverly' legally using means to avert additional payments above & beyong their own level of accountancy just fills me with horror.

Am i the only fucking pleb willing to pay his dues back into a system of managed countryside & elite avoiding off-shore tax havens/lets not dwell on the fact Eton (britcunts) has charitable status yet recieves affluent government provisions & any payments for services provided are also tax-deductable for the new camerons of this land. I'm mad & very much feel like watching the film network tonight.

 

Any bloody way they can make life harder for the working people of the UK the crunts are right there moving the goal posts to milk us dry.

At least we know the money will be spent wisely!!

 

I meant not attack on anyone individually as my brain turned off when i read upto the LM-enterprise part. I will dip my head in self loathing as I do not play the system to its fullest. Probably due another 7-day ban for hateful disruptive behaviour. Ow let the nukes fly & prove corbyn was a wimp not retaliating to a false-flag attack from usa_naziland! I mean russia & china'

 

#firstworldproblems

 

are you in liverpool pete or are you one of the ev's many welsh brothers?

 

I have two rental properties which are both mortgaged. I make about £40 a month on one (bank had to put up interest rates due to their f**k up and legislation that they need to hold more money in reserves. You couldnt make it up) and £150 in the other.
I started with nothing, never inherited anything, lost all that I had and then worked my way back to the "dizzy" heights of my vast empire today.
I will now be selling both these houses (taxed on the selling price also) and two rental properties will be taken off the market. Multiply that by a few thousand people and hey presto...tenants rent goes up due to lack of properties and the only people who can rent them a property are the large companies who wont have to pay the tax! All probably owned by school chums of politicians.

if there is somewhere that the middle class can make a bit of a living and we start to get "above ourselves" then the wankers will find a way to tax it. Then put back the retirement age as we are "living longer" just to make sure we can contribute more to the freeloaders.
The Bank of England interest rate has been 0.5% since 2009. Mortgage interest rates are nowhere near that.

 

on the plus side there's two more (presumably affordable) houses for sale that would have been monopolised by you so all good in the long run

 

From 1969 to 2000 owner-occupiers of properties got MIRAS (Mortgage Interest Relief at Source), which meant they did not have to pay income tax on that part of their income which they used to pay the mortgage interest. MIRAS was abolished, and from 2000 onwards owner-occupiers have had to pay mortgage interest from their taxed income.

This gave rise to the anomaly that an owner who rents out the property to someone else continues to get income tax relief on the interest he pays whereas an owner who lives in the property himself does not.

There has been much debate whether this anomaly should be ended or continued. The conclusion is that George Osborne has adopted a compromise. Income tax relief will in effect continue, but only at Basic Rate (20%); higher rate taxpayers will only get part of that relief. And the change will not be introduced until 2020, so those involved can take account of it in their long-term plans.

Needless to say, the writer of the Telegraph piece has explained none of this.

 

Is that because the interest paid by an owner who rents out the property is treated as an expense which comes out of profit before tax is paid ?

 

When I inherited 1/4 of a property worth £82K at the time, I bought he rest on a mortgage - at the time capital gains diminished and after 10 year I would have paid 10% tax. They changed the rules and when 10 year was up I had to pay about 3 times the amount in tax. I never earned anything over the 10 years but the property broke even and although my 'investment period' was through the big recession and I sold 3 years ago before the latest rises in property prices I still made a tidy sum on re sale. I then bought bikes. Buy bikes - it makes you happier

 

As a rule, private individuals pay income tax on their income, not on the difference between their income and their expenditure. It is businesses, not private individuals, which pay tax on the difference.

Why should individuals be allowed to offset some of their expenditure against their income, thereby reducing their tax liability, but only if they own rental properties?

 

@Pete1950 Individuals shouldn't but businesses should. Is buy to let a business or if it isn't a business what is it ? I don't know the answer here, and have no axe to grind, but as a general principle people should not be allowed to have their cake and eat it.

 

Interest paid on an interest only mortgage is a total loss, it's like throwing money in the bin. So yes it was classed as an expense because it was not money in your pocket and it was not buying you anything - i.e no gain

A repayment mortgage is different, all payments on the capital is treated as profit - you can not buy a house tax free. You can end up owing lots in tax and not actually earning enough to pay the tax... unless of course you are running a business from the premise that generates an income.

You can end up with a situation where the rent does not cover the mortgage after tax (interest only buy to let) because it's very un likey a landlord renting a property out has no other form of income because they won't make enough money to live off the money they make from the rental investment on it's own.

Not to mention the times when they are vacant, people will say that's fine your not making money so less tax but no, you still have to pay that mortgage. As said before most land lords will have another income so will still be paying tax even if this loss reduces the tax bracket they are in, they still have to keep paying the mortgage on the empty property.

Generally you need to upscale investment to make a wage more than you can earn working for someone so you can quit work and then you multiply the number of head aches and things to worry about.

You'd also be hard pushed to offset lots of expenses against a business long term when if it's running at a loss. questions would get asked if you made this a business model.

The problem is, small business, landlords etc do provide much needed services.
When the state did run some of these services they were making big losses and it was costing the tax payer more.

Privatise these and use state money i.e. benefits to pay landlords and the state want the cost to be less than when they owned the houses which was not cost effective year ago, so they are asking for charity?

Lots of the things the government target are actually saving the tax payer money,
but they would have you the public believe the business owners are greedy when they are trying to make it worth their time, i.e. if they have to quit work to manage business intrests they expect to earn a wage.

I would even bet most business owners who make a little bit of money across several small investments are making less for their time (overall) than they would make working in a good job with less responsibility and yet they never really clock off.

It is not about tax evasion, it is about being able to run a business not a charity.

You do not invest savings into a deposit on a property to house a stranger, and run at a loss or less than the money would make in savings with no effort or risk.

If you did the same for an industrial building and let it, it would be a business venture so why is property not clear cut. Pay tax on the money you make not on the overheads. Over heads are not a benefit but a necessity and these are costs to the landlord not profit, but interest is profit to the bank. No doubt the bank making billions from all the hard working business owners pays very little tax but you won't hear about that..

Also... perhaps more media BS
>The church of England grossed more than mcdonalds apparently,
> Facebook’s UK operations paid only £4,327 in taxes last year, less than the average worker.
The small bill was despite the company being able to pay its 362 UK-based employees an average of £210,000 in pay and bonuses. It gave its London staff Facebook shares worth £35.4 million, according to the report, pushing its losses to £28.5 million and so hugely reducing its tax bill.
They make revenue from the UK via users data and advertising.
> While the government boast, We are providing more than £1 billion in aid – making us the second biggest bilateral donor in the world. Our contribution is almost as much as the rest of the EU put together. We can be proud of our contribution.

Yet people (public) piss and winge about those in the UK that are just inside the 50% tax bracket who give a huge amount back to the country, via employment, (pensions and they will be helping fund the reduction in benefits soon too)

There is virtually no benefit to working your ass off unless you can avoid tax and the only people who can are those making billions, they don't own a few cheap properties.

When living wage comes in and then skilled workers wages go up, you'll have many small business owners earn less than the staff when you take into account, pensions, hoilday pay, maternity leave and we keep importing labour rather than train our own, these people will be eligible for benefits.

So I just wish people would stop bashing those killing themselves in the rat race that is become ridiculously difficult to make sense of it all, it's not the slightly better off you should be concerned about, you should pitty them trying to keep it all together, worrying about changes the government make, while those at the top exploit loop holes.

I would recommend anyone save tax where they can because those in charge will not look out for you regardless of your worth to society at any level.

 

@johnv Good question. It seems some people would like to be able to run their personal finances in such a way that they can call their affairs simultaneously either business or personal, whichever is to their greater financial advantage. I agree that people should not have it both ways. Either your transactions are personal, in which case you should be paying income tax on your income ... or you are running a business, in which case you should be liable for the taxes etc which apply to businesses' profits and gains.

 

Meanwhile back on this planet.....

How the hell will that help. There are already two families in the houses who are paying less than they will if they take out a mortgage given the deposit and hoops they will have to jump through to get the money in the first place. They cant acually get the deposit together to buy a house, henc they rent.

All that will happen is that one family will move out while another moves in. Hardly properties "monopolised"

Its pretty obvious. There are different tyes of landlords.
Companies who are most likely the most ruthless
Couples who have inherited or moved in together who are in negative equity who just want to cover the mortgage and expenses

The tenants will be the long term losers in this as less houses become available to rent.

 

"if there is somewhere that the middle class can make a bit of a living and we start to get "above ourselves" then the wankers will find a way to tax it."

just find it a bit hard to have any sympathy with the middle classes bemoaning the fact they cant make a profit off those less well off than themselves which you appeared to be doing (correct me if im wrong)