Lib-Con Attack On Middle-Class Btl`s Merged

[Wires 74]

Just what are folk like the Adam Smith Insititute on when they equate modest CGT`s liabilitys increases for second homes with an attack on `The Middle-classes` ...

Dr .Madsen POirie is raging that ` Traditional Tory voters certainly did not expect yet more punishment for productive members of the economy and there is likely to be a political backlash.

Anyone with investments in second properties, holiday homes or buy-to-let flats would probably be affected (although strictly defined business assets are exempt, along with first homes).

As a result, there will be what some observers have called 'a fire sale' of properties, as people rush to escape the tax. `

According to Pirie the entire ethos of Britain as a place to do business will be threatened by this ...

Read more: http://www.dailymail...l#ixzz0o5iKrLSM

[eek]

Anyone with investments in second properties, holiday homes or buy-to-let flats would probably be affected (although strictly defined business assets are exempt, along with first homes).

And the problem with that is......

Edited May 16, 2010 by eek

[EmpiricalBear]

This is a big test for me. If they stick to this I'll be happy.

I'd rather they still allowed a tax free gain of say £7000 per annum as this does reward share investors, and also ISA's to be left as they are as this also encourages productive investment.

Killing off BTL would help productive investment by reallocating the capital out of the deadness of property into equities etc.

[bendy]

productive members of the economy

btl landlords probably really think they are

[Spongethrower]

This is a big test for me. If they stick to this I'll be happy.

I'd rather they still allowed a tax free gain of say £7000 per annum as this does reward share investors, and also ISA's to be left as they are as this also encourages productive investment.

Killing off BTL would help productive investment by reallocating the capital out of the deadness of property into equities etc.

I was pleasantly surprised to hear Cameron basic spell this out as the aspiration of his new administration on the Andrew Marr show this morning. I think BTL's are going to be severely squeezed. If it happens then... Good on ya DC.

[Gone baby gone]

See my post in anecdotals. Just the threat of this is getting property onto the market already.

[Cogs]

How is landlordism and rent seeking "productive"?

Edited May 16, 2010 by Cogs

[The Masked Tulip]

http://www.telegraph.co.uk/finance/financetopics/budget/7729032/Tax-rises-could-prompt-fire-sale-of-second-homes-and-shares.html

A 'fire sale' of second-homes, shares and fine art is expected as investors try to beat widely-expected leaps in capital gains tax (CGT) and VAT.

Property owners and shareholders are seeking to sell assets to beat the anticipated rises, which are likely to be announced in Chancellor George Osborne's emergency budget next month and could be implemented immediately.

Buy-to-let landlords would be among those hardest hit by the increases, which could lead to a flood of extra property on the market.

Ronnie Ludwig, a partner at chartered accountants Saffery Champness, said: "We are likely to see a rush of sales of second homes and share portfolios where people are in a position to realise a gain and anyone with investments should think about their portfolio sooner rather than later.

"I have also had a number of clients say they are thinking about emigrating. Thousands of Britons emigrate every year and the favourable tax regime in other countries means they are unlikely to be put off by worries about the economy."

James Davies, investment research manager at financial advisers Chartwell Group, said its clients were being urged to consider whether it was worth selling assets.

He said: "Those who have made gains on property and are in a position to sell might be able to benefit from the current lower tax rate but it is hard to sell a house quickly.

"It is much more likely that we will see a short-term rise in sales of liquid assets such as shares or fine art."

Susan Johnson, director of heritage and taxation at Christie's said: "While we wouldn't expect an increase in CGT to lead to a significant increase in consignment levels from British collectors, we have had a number of enquiries from clients who are looking for

clarification and advice with regards their art and how it may be affected.

"The largest number of these calls have come from clients who were considering selling works of art in the next 12 to 18 months, and who are asking if they might benefit from reacting quickly with a pre-emptive move."

Simon Staples, sales and marketing director of the world's oldest wine dealer, Berry Bros & Rudd, said it had seen an upsurge in enquiries about investment in fine wine, which is largely exempt from CGT.

"We have taken one or two calls as people move away from investments that could be highly taxed," he said. "The problem will be finding wine to buy as we have seen a huge increase in demand in recent years from Hong Kong and mainland Chinese buyers."

Estate agent Knight Frank confirmed it had taken a number of calls from second-home owners contemplating a quick sale but said it was "far too early" to tell if there would be a rush of property sales and that many vendors were gambling on the Chancellor introducing the higher rate of CGT from April 2011.

Liam Bailey, head of residential research, said: "The initial response from the industry has been to suggest there will be a mass sell off of investment and second homes. This is unlikely.

"There will be some people who will look to dispose of assets sooner rather than later, to avoid the prospective tax. However most investors in residential property are in the market for the long term. With interest rates so low, rental yields have become a more important driver of demand rather than short term capital price growth."

He added that 70 per cent of second-home owners intended to retire to their other property making it unlikely they would rush to sell.

[Wires 74]

How is landlordism and rent seeking "productive"?

Well it isn`t -but the bigger the lie ...

[Cicero]

Liam Bailey, head of residential research, said: "The initial response from the industry has been to suggest there will be a mass sell off of investment and second homes. This is unlikely.

"There will be some people who will look to dispose of assets sooner rather than later, to avoid the prospective tax. However most investors in residential property are in the market for the long term. With interest rates so low, rental yields have become a more important driver of demand rather than short term capital price growth."

"Residential research" equates to some googling of local prices and graphs. I wonder if Liam has a Ph.D in economics?

As for his sage advice; "well he would say that wouldn't he?"

[The Masked Tulip]

Liam Bailey, head of residential research, said: "The initial response from the industry has been to suggest there will be a mass sell off of investment and second homes. This is unlikely.

"There will be some people who will look to dispose of assets sooner rather than later, to avoid the prospective tax. However most investors in residential property are in the market for the long term. With interest rates so low, rental yields have become a more important driver of demand rather than short term capital price growth."

"Residential research" equates to some googling of local prices and graphs. I wonder if Liam has a Ph.D in economics?

As for his sage advice; "well he would say that wouldn't he?"

Yes, take that quote with a pinch of salt.

I have a suspicion that the rich and informed will be dumping their 'investments' before the 50 day budget - typical of the Tories to give the rich a 50 day get out opportunity - and the day after the budget millions of 'ordinary folk' will wake up to the new taxes and start whinging en masse.

[Executive Sadman]

We are likely to see a rush of sales of second homes

I Highly doubt that. More than likely they'll just sit there on the estate agents books for all eternity 'waiting for the market to catch up'

[Cicero]

Yes, take that quote with a pinch of salt.

I have a suspicion that the rich and informed will be dumping their 'investments' before the 50 day budget - typical of the Tories to give the rich a 50 day get out opportunity - and the day after the budget millions of 'ordinary folk' will wake up to the new taxes and start whinging en masse.

Amazing how timing favours the well informed isn't it?

[LiveinHope]

[The Masked Tulip]

Amazing how timing favours the well informed isn't it?

Not surprised, but it is interesting how few EAs I have spoken to in the past week who have any idea of even the possibility of CGT on BTLs and second homes.

[The Masked Tulip]

Amazing how timing favours the well informed isn't it?

Not surprised, but it is interesting how few EAs I have spoken to in the past week who have any idea of even the possibility of CGT on BTLs and second homes.

[Georgia O'Keeffe]

hilarious for the last year people have been piling there supposedly worthless money into art, wine, property whatever because they were savvy, sometimes it helps to do a bit of forward thinking when making an investment and consider potential future conditions rather than current conditions

[Cicero]

Not surprised, but it is interesting how few EAs I have spoken to in the past week who have any idea of even the possibility of CGT on BTLs and second homes.

Most EAs don't bother actively researching. Talking utter BS is their modus operandi.

[lurker07]

hilarious for the last year people have been piling there supposedly worthless money into art, wine, property whatever because they were savvy, sometimes it helps to do a bit of forward thinking when making an investment and consider potential future conditions rather than current conditions

I went to Majestic recently to stock-up, but certainly not as an investment.

[The Masked Tulip]

The Times reporting David Cameron on the Andrew Marr show this morning:

He defended a series of tax rises, including a hike in capital gains tax from 18 per cent to as much as 40 per cent, saying that the increase would draw a distinction between investments that helped the economy and those like second homes.

[NEO72]

See my post in anecdotals. Just the threat of this is getting property onto the market already.

Yep, I reckon the threat of being squeezed alone will tip the balance for many in favour of selling whether or not it amounts to anything.

Also, it'll put off many potential BTLers.

All good for the HPC cause

[NEO72]

So the supply of homes for sale will increase - well that's ok, it's not like it's been increasing anyway. Hang on...

Another thing, as I mentioned on another thread, it'll also put off many potential BTLers thereby lowering demand.

So increased supply + lower demand = ???

[Toto deVeer]

So the supply of homes for sale will increase - well that's ok, it's not like it's been increasing anyway. Hang on...

Another thing, as I mentioned on another thread, it'll also put off many potential BTLers thereby lowering demand.

So increased supply + lower demand = ???

Statistically, house prices have generally appreciated more under Labour than under the Conservatives. Maybe that's because the Cons end up taking over the mess left by the Labs, and making the hard decisions to put it right again...

All these proposals sound good to me. I've always hated the rent-seeking economy. Does nothing to improve the country.

[The Ayatollah Buggeri]

An article in the personal finance section of one of the papers I was reading in the pub this lunchtime pointed out that second home owners would still be able to 'flip', like the MPs were doing: i.e. if they want to sell their second home or BTL without paying the extra tax, they could designate it as their main residence just before doing so, thereby dodging the CGT. The journalist speculated that there were no plans to close the loophole before hiking CGT.

If this is true then I can't see the CGT rise making any difference to BTL-ers, except in the case of married couples who own more than three properties between them (bearing in mind that transfers of assets between spouses are tax free). And in that scenario Cameron has played a very clever game - appearing to be clamping down on second home owners, while in reality he's only going to hit the owners of three homes plus.

[Stars]

How is landlordism and rent seeking "productive"?

It isn't, it is anti-productive

The conservatives have been talking self serving nonesense on this issue since their inception

If this has changed, then the conservative party has changed it's position for better quite considerably...in fact, in a game changing way