Btl As A Business

[2buyornot2buy]

To be honest I think it only works for properties below 100k. For one of those small belfast semis at 175k you would need to be getting rent of 1000 a month to meet most BTL criteria (7% at 125% of IO mortgage). Not going to happen when 66% of the market receive housing benefit.

Properties at under 50k maybe but wouldn't be worth the hassle.

[Shotoflight]

Buy-to-let borrowers face fees hike reported in B tel - not sure if it even applies to NI given small no.

http://www.belfasttelegraph.co.uk/business/business-news/buytolet-borrowers-face-fees-hike-29602639.html

Thousands of buy-to-let borrowers are facing a steep increase in their monthly mortgage payments after interest rates were increased by 2% despite being linked to the Bank of England rate.

West Bromwich Building Society is hiking rates on some of its tracker loans, affecting around 6,700 customers, in a change which will increase repayments on a £200,000 loan by an estimated £330.

The move adds to costs for private landlords and has led to concerns that other lenders may follow suit after a similar move by the Bank of Ireland earlier this year.

Tracker mortgages are generally advertised as being linked to the Bank of England rate - but this has not changed for four years, remaining at an historic low of 0.5% which the Bank has indicated will not change until 2016.

But a spokesman for the West Bromwich said: "We believe it is very clearly stated in terms and conditions about the circumstances in which changes to the rates could happen."

The mutual said in a statement: "These changes, which are permitted under the terms and conditions of the accounts, are a reflection of market conditions and the need for us to carry out our business prudently, efficiently and competitively."

Landlords with West Bromwich face tracker mortgage rise

http://www.bbc.co.uk/news/business-24203736

Some 6,700 landlords who hold buy-to-let tracker mortgages with the West Bromwich Building Society face a two percentage point rise on 1 December.

http://www.theguardian.com/money/2013/sep/23/west-bromwich-interest-rates-buy-to-let-mortgage

[Shotoflight]

Landlords threaten legal action over mortgage rates

http://www.bbc.co.uk/news/business-24676086

The West Bromwich Building Society argues that the wholesale cost of funding buy-to-let mortgages has risen significantly.

Long-term interest rates have risen, with the market now expecting the Bank of England to raise base rates in 2016.

"Market conditions have changed significantly since these buy-to-let mortgages were taken out, resulting in an increased cost of funding them," a spokesman for the building society told the BBC.

It also argues that landlords have enjoyed a dramatic fall in interest payments, as base rates have gone down.

Assuming they did not cut rents when their borrowing costs fell, it also claims they would have seen an increase in their income.

"We have held off on making any changes to rates for as long as we feel reasonable, but have acted now to balance the interests of the Society's wider membership, particularly our savers, whose income has fallen," it said.

"An additional percentage of 2% will be added to these buy-to-let mortgages from 1 December 2013 to make up an overall rate of interest."

It also insists that the change is permitted under the terms and conditions of the accounts.

[Shotoflight]

Buy-to-let investors enjoy £5bn 'subsidy' UK NB investing article from NIHE - Joe Frey - in UUJ survey,other thread

New figures showing landlords' taxbreaks leads to calls for tougher legislation

http://www.telegraph.co.uk/finance/personalfinance/10472403/Buy-to-let-investors-enjoy-5bn-subsidy.html

Over one million landlords claim annual tax breaks on their investment properties each year, citing tax-deductible costs totalling £13bn. These are legitimate expenses, the biggest of which is the £6bn annual cost of interest paid on buy-to-let mortgages.

Using assumptions about the tax brackets into which most landlords are likely to fall, a think tank - the Intergenational Foundation - has calculated these reliefs cost the wider taxpaying public up to £5bn per year. It has published the information in a report with the provocative title "Why Buy to Let equals Big Tax Let-off".

The tax relief figures surfaced in a Freedom of Information request undertaken by the Intergenerational Foundation, and relate to the tax year 2010-11.

The organisation says landlords benefit "unfairly" from being treated as other businesses, enabling them to offset an array of costs and reduce their taxable incomes substantially. Other special perks and "loopholes" make the public subsidy evern more attractive to investors.

The "wear and tear" allowance, for example, which enables landlords to claim 10pc of gross rent without detailing their expenditure on the property, is also "unfair and distortive", it is argued. The ability of landlords to avoid paying capital gains tax on their property for the last three years of ownership, if they ever lived there, is another reason why the sector is "under-taxed".

More contrvoversially, the Foundation said the rapid growth of buying-to-let "places first-time buyers at a disadvantage". It says the average landlord is 53 and wealthier than the wider public; and that there is "clear evidence the growth of BTL increases overall house prices" and "prevents young people from saving" due to high rents.

The Foundation is calling on Government to scrap some of the allowances made to landlords. But it claims one reason why tax perks are so generous is that "current members of parliament are statistically more likely to be landlords than members of the general population", as shown in the table it published.

[BelfastVI]

Buy-to-let investors enjoy £5bn 'subsidy' UK NB investing article from NIHE - Joe Frey - in UUJ survey,other thread

New figures showing landlords' taxbreaks leads to calls for tougher legislation

http://www.telegraph.co.uk/finance/personalfinance/10472403/Buy-to-let-investors-enjoy-5bn-subsidy.html

Over one million landlords claim annual tax breaks on their investment properties each year, citing tax-deductible costs totalling £13bn. These are legitimate expenses, the biggest of which is the £6bn annual cost of interest paid on buy-to-let mortgages.

Using assumptions about the tax brackets into which most landlords are likely to fall, a think tank - the Intergenational Foundation - has calculated these reliefs cost the wider taxpaying public up to £5bn per year. It has published the information in a report with the provocative title "Why Buy to Let equals Big Tax Let-off".

The tax relief figures surfaced in a Freedom of Information request undertaken by the Intergenerational Foundation, and relate to the tax year 2010-11.

The organisation says landlords benefit "unfairly" from being treated as other businesses, enabling them to offset an array of costs and reduce their taxable incomes substantially. Other special perks and "loopholes" make the public subsidy evern more attractive to investors.

The "wear and tear" allowance, for example, which enables landlords to claim 10pc of gross rent without detailing their expenditure on the property, is also "unfair and distortive", it is argued. The ability of landlords to avoid paying capital gains tax on their property for the last three years of ownership, if they ever lived there, is another reason why the sector is "under-taxed".

More contrvoversially, the Foundation said the rapid growth of buying-to-let "places first-time buyers at a disadvantage". It says the average landlord is 53 and wealthier than the wider public; and that there is "clear evidence the growth of BTL increases overall house prices" and "prevents young people from saving" due to high rents.

The Foundation is calling on Government to scrap some of the allowances made to landlords. But it claims one reason why tax perks are so generous is that "current members of parliament are statistically more likely to be landlords than members of the general population", as shown in the table it published.

On one hand the Government wants to encourage private investment into both the private rented sector and even the social rented sector. Investors are used to paying tax. The tax is payable on profit and the profit is calculated by subtracting the allowable expenses, such as interest and wear and tear from the income. you cannot suddenly make the allowable costs different for one particular type or sub group of business.

[2buyornot2buy]

On one hand the Government wants to encourage private investment into both the private rented sector and even the social rented sector. Investors are used to paying tax. The tax is payable on profit and the profit is calculated by subtracting the allowable expenses, such as interest and wear and tear from the income. you cannot suddenly make the allowable costs different for one particular type or sub group of business.

You can. It happens all the time.

[yadayada]

On one hand the Government wants to encourage private investment into both the private rented sector and even the social rented sector. Investors are used to paying tax. The tax is payable on profit and the profit is calculated by subtracting the allowable expenses, such as interest and wear and tear from the income. you cannot suddenly make the allowable costs different for one particular type or sub group of business.

'Course you can. Aren't foreigners going to have to pay capital gains tax on residential property sales from now on? Similarly, down south they changed tax deductibility for interest on residential investments a couple of years ago, and forestry investments were completely tax free until they weren't.

There was a proposal a few years ago to make profit on your own home sale subject to capital gains tax. Too late now of course and not very likely to raise much money here, but it would have been helpful in avoiding the worst excess of the bubble.

Edited November 26, 2013 by yadayada

[BelfastVI]

edit

Edited November 26, 2013 by BelfastVI

[BelfastVI]

Off shore investors will always have a different tax standing. Similarly I would he treated different investing property in say Spain compared to a resident. And yes there are incentives given to certain green industries and the film industry.

However, it is my understanding that a tax deductible expense, such as interest and wear & tear remain the same in the UK across all business. We are not talking about CGT, which can be very complex as your own home is tax free etc and shares are somewhat different. We are not talking about investing overseas or a non-resident investing here as that will always have its own complexities. And we are not talking about green or film industry incentives.

In business you pay tax on the declared profit. That profit is calculated by taking allowable expenses from income. In allowable expenses is interest and wear & tear (depreciation or maintenance). Maybe there is a business example out there where these are not allowable (tax deductible) expenses, I can't think of any and would like to know if there is.

[2buyornot2buy]

Holiday lettings.

[Shotoflight]

Landlords urged to disclose rental income to HMRC

http://www.belfasttelegraph.co.uk/business/news/landlords-urged-to-disclose-rental-income-to-hmrc-29959551.html

It may have seemed like a good investment, but residential landlords who haven't declared their rental income could be in for a nasty New Year's surprise.

HMRC are cracking down on those who don't pay income tax on their rental income and they could face a hefty bill and penalty for tax evasion.

ASM Chartered Accountants said landlords need to work out exactly how much they should be paying and avoid any penalties.

ASM tax director Caroline Keenan said: "There are many reasons why landlords may misunderstand the rules and so not pay the right amount of tax, but instead of waiting for HMRC to uncover any tax evasion, we would recommend buy-to-let residential landlords should review their affairs, and if applicable, consider coming forward by making a voluntary disclosure."

The 'Let Property Campaign' will offer reduced penalties to those who set their tax affairs in order now, while those who are later found to have underpaid their tax could face criminal prosecution. The Treasury estimates that as many as 1.5 million landlords may not have paid what they owe.

[Shotoflight]

Buy-to-let Britain: renting has doubled since 2000 EXCLUDES NI

Housing shortages and the mortgage drought are just two reasons why 10m now rent - and pay record sums to do so

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10608982/Buy-to-let-Britain-renting-has-doubled-since-2000.html

A sixth of the UK's population - some 10m people - now live in accommodation rented from private landlords. This proportion has roughly doubled since 2000.

This growth is predicted to continue rising, according to a report published today by property group Knight Frank.

Knight Frank's figures reflect the reversal in the trend of home ownership, which grew to a peak of 69pc of all UK households in 2001, but has since tumbled and is now below 65pc.

Knight Frank says 17pc of the UK's households rent in the private sector, up from around the 8pc level where it had previously stabilised through much of the 1990s.

By region the change is more diverse with the most expensive areas - such as major cities and the south east - seeing the proportion of private tenants leap far more.

The increase in private renting appears to have accelerated since the onset of the financial crisis in 2008 (see graph, below). Knight Frank attributes this to "clampdown in mortgage lending" but also to "a mix of the scrapping of rent controls, the proliferation of buy-to-let mortgages and rising prices in relation to earnings."

Knight Frank added: "Those with high levels of equity or cash were much less affected by the credit crunch and as such were in a position to invest in rental property, underlining the role that equity has played in the expansion of the sector."

[Shotoflight]

When one house is never enough.........

SDLP leader’s register of interest lapse ‘due to an administrative error…’

http://sluggerotoole.com/2014/01/31/sdlp-leaders-register-of-interest-lapse-due-to-an-administrative-error/

From his election to Westminster in 2005 up until 2009 the SDLP leader claimed more than £86,000 on expenses towards the mortgage interest on the Vauxhall apartment.

When he bought the property in 2005 Dr McDonnell also claimed £13,800 in stamp duty from parliamentary expenses and £1,360 for blinds and curtains.

Edited January 31, 2014 by Shotoflight

[Shotoflight]

Buy-To-Let Borrowing Rates Dive To New Low

The rates are at their lowest since before the recession, fuelling fierce competition between landlords and would-be buyers.

http://news.sky.com/story/1208458/buy-to-let-borrowing-rates-dive-to-new-low

The reduction in rates, and steady rise over 2013 in buy-to-let lending, is fuelling fierce competition between landlords and would-be first-time buyers.

The rental market is also contributing to the competition due to a wider reversal in the trend of home ownership.

Roughly 10 million people now live in homes rented from private landlords. That's double the number who did back in 2000.

In addition, lenders are increasingly keen to attract new business and are reducing their rates.

The Office for Budget Responsibility, the Government's preferring think-tank, forecasts house prices will rise by 27% by 2018 and property investors want to profit from that growth.

Research by Mortgages for Business found that 57% of buy-to-let landlords wanted to buy more properties this year alone.

While many economists expect interest rates to rise sooner than expected, and that would help slow the buy-to-let boom, it's unlikely to come soon enough for first-time buyers currently facing such stiff competition.

[little fish]

Stephen Noakes, the new CML chair wants more tax incentives for Landlords so that they keep their houses maintained.

http://www.mortgagestrategy.co.uk/news-and-features/covers/the-shape-of-things-to-come/2005629.article

One way landlords could be motivated to improve housing could be via providing tax incentives to landlords on any investment they make for improving their properties.

“Even if that tax relief was provided, inevitably there may some landlords who would be reluctant to make those investment calls,” he says. “And actually having improved registers and licensing of private rental sector landlords is also beneficial in terms of making sure that they are doing what they need to do.

[martymcfly]

Stephen Noakes, the new CML chair wants more tax incentives for Landlords so that they keep their houses maintained.

http://www.mortgagestrategy.co.uk/news-and-features/covers/the-shape-of-things-to-come/2005629.article

Is that in addition to the current tax break of just not paying their tax??

[little fish]

Is that in addition to the current tax break of just not paying their tax??

Sounds like it. The sub £100,000 market in NI is apparently rife with new 'investors' too. Know of 3 FTB in this price range outbid by LL in the past two weeks alone (East & North Belfast). I hate to say it but the LL's could be setting the market off again.

Some people never learn.

Edited February 9, 2014 by neontetra

[2buyornot2buy]

Sounds like it. The sub £100,000 market in NI is apparently rife with new 'investors' too. Know of 3 FTB in this price range outbid by LL in the past two weeks alone (East & North Belfast). I hate to say it but the LL's could be setting the market off again.

Some people never learn.

I expect you could be right. A clear advantage the LL has is not having to provide earnings figures. Provided the property is "self-financing" (25%+ interest only mortgage. Get an EA friend to make something up, they have in the past) you can borrow what you like. Who cares if you have a void, you can get this money from the money tree. Some posters here know where they grow.

A friend recently sold a house, standard semi, in Antrim, buyer was co-ownership (went for 117k). They outbid another working couple by 8k.

[little fish]

I expect you could be right. A clear advantage the LL has is not having to provide earnings figures. Provided the property is "self-financing" (25%+ interest only mortgage. Get an EA friend to make something up, they have in the past) you can borrow what you like. Who cares if you have a void, you can get this money from the money tree. Some posters here know where they grow.

A friend recently sold a house, standard semi, in Antrim, buyer was co-ownership (went for 117k). They outbid another working couple by 8k.

Unregulated, unchecked and untaxed.

Nice wee bundle and things are just getting better & better.

MMR comes in on the 26th April and lenders are to ramp up BTL to cover any 'slow periods' in the change over (to the way things should have always been done).

Mark Dyason, broker Edinburgh Mortgage Advice, says lenders will need to ease criteria in the near future if they are to increase lending volumes.

"Buy-to-let will be the pressure valve as MMR causes residential lending to slow down," he said.

Ease criteria? I must be seeing, hearing things - with LTV, rent valuation, name, address and DOB the main criteria, what is there that can be eased further? Oh silly me, Mortgage Trust (not NI) have jumped back into the market with 80% LTV BTL. The rest will follow shortly. Here we go on a bank planned BTL blitz.

http://www.mortgages...r-hits-analysis

On a jollier note, I have been laughing at this for days now...

http://www.mortgages...2006150.article

Our customers won't know what they spend their money on

[Shotoflight]

Landlord Registration Scheme

http://www.nidirect.gov.uk/landlord-registration-scheme

The Landlord Registration Scheme will collect and maintain up-to-date and accurate information on landlords and their properties. Under the law, from 25 February 2014, all private landlords must register.

Why has private landlord registration been introduced?

Until the introduction of this scheme each council collected information about landlords in their council area, but many private landlords have properties in a number of different council areas and the information was not easily accessible.

A centrally held register of private landlords will:

allow tenants, neighbours and local councils to identify if landlords are registered

provide information on the number of landlords in Northern Ireland and allow landlords to receive regular updates on the duties and responsibilities of landlords and tenants

provide education and support to landlords

It will improve tenants’ confidence in their landlords and increase landlords’ accountability by:

promoting good practice

ensuring appropriate advice and assistance is available

What information is available through the registration website?

If you enter the landlord’s name, you will find out whether they are registered or not.

[2buyornot2buy]

Landlord Registration Scheme

http://www.nidirect.gov.uk/landlord-registration-scheme

The Landlord Registration Scheme will collect and maintain up-to-date and accurate information on landlords and their properties. Under the law, from 25 February 2014, all private landlords must register.

Why has private landlord registration been introduced?

Until the introduction of this scheme each council collected information about landlords in their council area, but many private landlords have properties in a number of different council areas and the information was not easily accessible.

A centrally held register of private landlords will:

allow tenants, neighbours and local councils to identify if landlords are registered

provide information on the number of landlords in Northern Ireland and allow landlords to receive regular updates on the duties and responsibilities of landlords and tenants

provide education and support to landlords

It will improve tenants’ confidence in their landlords and increase landlords’ accountability by:

promoting good practice

ensuring appropriate advice and assistance is available

What information is available through the registration website?

If you enter the landlord’s name, you will find out whether they are registered or not.

Subject to FOI requests too.

[yadayada]

No doubt someone will emerge to say houses are on their way up and you can't lose. Because no matter what happens in the Ukraine or Russia it won't make any difference to our robust economy.

[Shotoflight]

Landlord & property search link

https://landlordregistration.nidirect.gov.uk/

[little fish]

http://www.mortgagei...-let_market.htm

Maybe heading in the right direction...

From the link

"McCann said the Chancellor could use the budget to take "some of the heat out of the property market and increase supply of typical first-time-buyer properties". He said: "The Chancellor may look to squeeze the Buy-to-let market in his next Budget. At the moment, mortgage interest payments on rental properties can be deducted from income along with other management expenses such as repairs, insurance and certain travel expenses, to help reduce any income tax that may be due.

"This is a very attractive tax-break for investors and makes typical rental properties – which also tend to be wanted by first-time-buyers – all the more in demand.

"The Chancellor has already made a huge commitment to first-time-buyers through schemes such as Help to Buy.

"Removing or reducing the tax break would be very unpopular with landlords but may help people to take their first steps on the housing ladder and ease pressure on demand for new housing stock."

The Budget will be announced next Wednesday."

[yadayada]

Over to you belfast vi