Jump to content
House Price Crash Forum
Jimmy_James

Grant Shapps Announces Tax Break For Btl Landlords

Recommended Posts

This is the tax cut the landlord lobby has been pushing for for a long time (PricedOut did some work on it when Gordon Brown floated the idea in 2010, see here: http://www.guardian.co.uk/business/2010/mar/15/first-time-buyers-priced-out )

Shapps has just announced on Twitter that this tax cut is going ahead on lower stamp duty for multiple purchasers of new build

He said he was spending the weekend with the BTL lobby - seems like it paid off for them.

Share this post


Link to post
Share on other sites

This is the tax cut the landlord lobby has been pushing for for a long time (PricedOut did some work on it when Gordon Brown floated the idea in 2010, see here: http://www.guardian.co.uk/business/2010/mar/15/first-time-buyers-priced-out )

Shapps has just announced on Twitter that this tax cut is going ahead on lower stamp duty for multiple purchasers of new build

He said he was spending the weekend with the BTL lobby - seems like it paid off for them.

Well I know that stamp duty is a very odd tax, with ridiculous marginal rates at the threshold. Why they dont band it like income tax is beyond me.

But any move to favour landlords over everyone else is just wrong.

I am with you I think, what we should have is a tax on land, that is progressive. So if you are a landlord that owns lots of properties, you get a massive bill each year. It looks though, that there just isnt a strong enough group opposing the systematic landlordisation of this nations living space.

Share this post


Link to post
Share on other sites

Presumably multiple landlords currently break their purchases into lots of little transactions to get lower stamp duty rates. :unsure:

This is just avoiding them having to do that.

Share this post


Link to post
Share on other sites

Move confirmed by a happy National Landlords Association: http://nlauk.wordpress.com/2011/03/23/if-at-first-you-don%e2%80%99t-succeed-%e2%80%93-try-try-try-again/

This is a major step in the right direction by Treasury, and a very welcome one from a landlord’s perspective.

Put into context, this represents significant potential savings for investor landlords.

Edited by Jimmy_James

Share this post


Link to post
Share on other sites

This is the tax cut the landlord lobby has been pushing for for a long time (PricedOut did some work on it when Gordon Brown floated the idea in 2010, see here: http://www.guardian.co.uk/business/2010/mar/15/first-time-buyers-priced-out )

Shapps has just announced on Twitter that this tax cut is going ahead on lower stamp duty for multiple purchasers of new build

He said he was spending the weekend with the BTL lobby - seems like it paid off for them.

Yep, this was by far the most worrying housing-related part of the Budget, IMO.

More here:

http://www.mortgagestrategy.co.uk/economy/budget-2011-stamp-duty-land-tax-reform-for-bulk-purchases/1028291.article

If the buyer chooses, the rate of Stamp Duty Land Tax on purchases of multiple residential properties will be determined by the mean value of the dwellings purchased, subject to a minimum rate of 1%, rather than their aggregate value as is currently the case.

The coalition claims this will reduce a barrier to investment in residential property, promoting private rented housing supply, as well as encouraging investment and exports as a route to a more balanced economy.

Share this post


Link to post
Share on other sites

The coalition claims this will reduce a barrier to investment in residential property, promoting private rented housing supply, as well as encouraging investment and exports as a route to a more balanced economy.

Exports?!

Peter.

Share this post


Link to post
Share on other sites
If the buyer chooses, the rate of Stamp Duty Land Tax on purchases of multiple residential properties will be determined by the mean value of the dwellings purchased, subject to a minimum rate of 1%, rather than their aggregate value as is currently the case.

Hmm, so if I was say.. buying a £1.9m house in London and liable to 5% stamp duty.. (£95,000) I could also buy a junk property, a caravan in Wales for say £10k, bringing the average down to £950k, and only pay 4% (£76,000)

I could then dispose of the caravan at my leisure for what I paid for it and save myself nearly £20k in the process.

I can see plenty of "avoidance vehicles" being set up this way.

Edited by exiges

Share this post


Link to post
Share on other sites

From the link it says:

For Example:

A landlord buying five properties valued at £200,000 each would currently face a tax bill of five percent i.e. £50,000.

Being able to choose to pay SDLT in relation to the average property value means that the one percent rate applies, and therefore the final bill is reduced to £10,000.

That is absolutely scandalous. A free £40k for landlords?

Share this post


Link to post
Share on other sites

Could it be a just a new incentive to shift the thousands of empty new build flats and make way for more to be built ,I see the one`s to benefit the most will be the housing associations

But the empty new builds around my way don`t meet the build standard`s or the size requirement of the HA`s

Share this post


Link to post
Share on other sites

From the link it says:

That is absolutely scandalous. A free £40k for landlords?

It's not that bad though because, as someone else pointed out above, they can avoid this now by splitting the transactions.

It actually makes no sense for them to pay 5% SDLT when the rate for properties under £250k is 1%.

Share this post


Link to post
Share on other sites

From the link it says:

That is absolutely scandalous. A free £40k for landlords?

Government going out of its way to help the FTB, so much so there is no need ever to involve them in any discussions.

I imagine all governments seem to see the average FTB as the 'greater fool' to help the Ponzi bubble along. Contemptuous.

Share this post


Link to post
Share on other sites

I think this is a non event. If you're buying 5 new builds at 200k each, you pay the 1% on each property, rather than 5% of the total. Makes sense and I doubt anyone ever paid the full amount anyway.

Why is there stamp duty on new builds? Don't they already include VAT?

Share this post


Link to post
Share on other sites

Government going out of its way to help the FTB, so much so there is no need ever to involve them in any discussions.

I imagine all governments seem to see the average FTB as the 'greater fool' to help the Ponzi bubble along. Contemptuous.

Indeed - every single measure relating to housing seems entirely aimed at maintaining their 'value'. I can't imagine why - I mean it's not like any major financial institutions' balance sheets depend on high property values... ;)

Anyone posted this clip before?

Share this post


Link to post
Share on other sites

I think this is a non event. If you're buying 5 new builds at 200k each, you pay the 1% on each property, rather than 5% of the total. Makes sense and I doubt anyone ever paid the full amount anyway.

Why is there stamp duty on new builds? Don't they already include VAT?

It says you only pay 1% on one of the £200k properties instead 5% on the £1m invested.

Share this post


Link to post
Share on other sites

I think this is a non event. If you're buying 5 new builds at 200k each, you pay the 1% on each property, rather than 5% of the total. Makes sense and I doubt anyone ever paid the full amount anyway.

The old scheme of the total value was silly because buying 5 new builds at £100k each, 1 from 5 developers put you in 1% stamp duty bracket, but buying 5 from 1 developer put you in 4% stamp duty territory.

However, the new proposal goes too far the other way and now gives incentives for creative accounting to bring the average property price down to bring you down a stamp duty band or two

Share this post


Link to post
Share on other sites

The old scheme of the total value was silly because buying 5 new builds at £100k each, 1 from 5 developers put you in 1% stamp duty bracket, but buying 5 from 1 developer put you in 4% stamp duty territory.

However, the new proposal goes too far the other way and now gives incentives for creative accounting to bring the average property price down to bring you down a stamp duty band or two

Could we see country mansions being sold by the room?

Share this post


Link to post
Share on other sites

The old scheme of the total value was silly because buying 5 new builds at £100k each, 1 from 5 developers put you in 1% stamp duty bracket, but buying 5 from 1 developer put you in 4% stamp duty territory.

However, the new proposal goes too far the other way and now gives incentives for creative accounting to bring the average property price down to bring you down a stamp duty band or two

In the example of 5 x £200k houses why do they pay 1% on an average of £200k? Doesn't the removal of stamp duty below £250k apply?

Share this post


Link to post
Share on other sites

In the example of 5 x £200k houses why do they pay 1% on an average of £200k? Doesn't the removal of stamp duty below £250k apply?

I don't think it does - from what I've read, it's subject to a minimum rate of 1%.

Share this post


Link to post
Share on other sites

From the link it says:

That is absolutely scandalous. A free £40k for landlords?

Seems reasonable to me to give a quantity discount. The government has to persuade someone to supply all the homes to the million or so on the social housing list because the government cannot afford to do it. Btl is the only way i am afraid.

Share this post


Link to post
Share on other sites

From the link it says:

That is absolutely scandalous. A free £40k for landlords?

It's not a "free" 40K.

they could achieve exactly the same saving by buying the properties separately and all this change does is save the need for extra paperwork

tim

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.