Friday, Mar 10, 2017

Buy to let a dying tax dodge

Daily Telegraph: What does the budget mean fro buy tolet landlords

This article is a reminder of just how hard the high loan to value Buy to Letters are going to be hit in the next few years. From April 6th they will be taxed on 25% of their mortgage interest leading to 100% by 2021. This will put many under water based on current low interest rates. Add in a small rise in interest rates and changes in NI and much off this sector will unravel. Already we have seen a massive decline in people buying Buy to Let. The next stage will be people selling. A lot of landlords are crying that this will create a housing shortage and put up rents. This is nonsense as houses get recycled not demolished. so a house taken out of the buy to let sector becomes an owned house and one less renter.

Posted by britishblue @ 08:21 AM (3336 views) Add Comment

2 Comments

1. mombers said...

Believe it or not, self employment as a landlord is not subject to NI at all. So if you work for a living, you pay 29% with very few allowable deductions from turnover, but if you're a rentier, you get to deduct all sorts of goodies, then pay 2/3 of the rate on this artificially reduced profit. Note that for higher rate taxpayers it's a lot flater - 40% vs 42%.

Friday, March 10, 2017 09:51AM Report Comment
 

2. britishblue said...

Wow! someone should tell Hammond. if he wants to equalise self employment with employment, perhaps he should equalise rentiers with renters.

Friday, March 10, 2017 06:18PM Report Comment
 

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