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Half a million landlords to be hit with 40pc tax raid under new rules

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3 minutes ago, SarahBell said:

They have so much warning time to do something about their situations.
" The crackdown, once fully phased in by 2021 "


 

Even better, most of them will be selling into a falling market.

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14 minutes ago, SarahBell said:

They have so much warning time to do something about their situations.
" The crackdown, once fully phased in by 2021 "


 

As I commented elsewhere when posting this, Osbourne even gave them a mini-boom (from Jan - March 2016) to sell into

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15 minutes ago, eek said:

As I commented elsewhere when posting this, Osbourne even gave them a mini-boom (from Jan - March 2016) to sell into

Yes a mini boom was the opportunity to sell for many but some didn't. It is hard to get out of the greed trap.

Edited by Fairyland

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I know a few LL's with decent size portfolio's(10+) who are going to be crippled by this.Currently declaring less than £40,000 in profits on turnover of £150,000 +

 

I don't know whether to laugh more at Cherry losing or them getting nailed.................

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Some of the reactions from facebook group :- "Axe the tenant tax"

what if landlord would refuse to pay tax on the invisible income?

You are simply Genius, Dr Ros has been looking for fresh thinking.

Mine will go from £20k to £50k. It's not worth the hassle anymore. It will mean I am working for washers !!!!

It will mean you are leveraged leech, nothing else.

Has anybody sat down and worked out if it would be cheaper for a landlord to keep their properties empty? If they need to avoid being pushed into a higher tax bracket and losing child ben etc. It may be more cost effective to just pay the mortgage and council tax on the empty property Especially once the all relief is abolished. I have a cpl of properties in negative equity so loathe to sell but seriously looking at the costings of keeping them empty until their values rise

Sorry I didn't get you. 

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5 minutes ago, hi5lo5 said:

 


I have a cpl of properties in negative equity so loathe to sell but seriously looking at the costings of keeping them empty until their values rise

Sorry I didn't get you. 

 

:lol: How stupid can someone be - some times you just have to swallow the loss as it will never get any better.

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7 minutes ago, Fairyland said:

What if an LL does not declare BTL? Will HMRC find out through council tax/utility bills for given address?

Nope its even better.

For managed Lettings the Agent has a report the LL details to HMRC.

For self managed there are two ways.

1. Council of Mortgage lenders and HMRC have an agreement to share the data between them, primarily this was done in the interest of Mortgage Lender to verify the Income of the applicant(s).

2. HMRC can request data from all deposit protection schemes.

 

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Landlords will face an impossible decision of whether to increase rents and cause misery for their tenants, or to sell-up, and force their tenants to find a new homeRichard Lambert, National Association of Landlords

:rolleyes:

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3 minutes ago, Bruce Banner said:

Landlords will face an impossible decision of whether to increase rents and cause misery for their tenants, or to sell-up, and force their tenants to find a new homeRichard Lambert, National Association of Landlords

:rolleyes:

The possibility that today's tenants are tomorrow's buyers has not crossed this fool's mind. 

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4 minutes ago, Bruce Banner said:

Landlords will face an impossible decision of whether to increase rents and cause misery for their tenants, or to sell-up, and force their tenants to find a new homeRichard Lambert, National Association of Landlords

:rolleyes:

The house just disappears off the face of the earth, does it Mr Lambert? Or could it possibly be bought as a home by renters, who thus free up their rental for another tenant....

 

 

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5 minutes ago, Bruce Banner said:

Landlords will face an impossible decision of whether to increase rents and cause misery for their tenants, or to sell-up, and force their tenants to find a new homeRichard Lambert, National Association of Landlords

:rolleyes:

Landlords are afraid of being Bankrupt , paranoid of needing to find a real job.

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2 minutes ago, John The Pessimist said:

The possibility that today's tenants are tomorrow's buyers has not crossed this fool's mind. 

Why would it? Landlords are benevolent demigods without whom their tenants would not know where to turn.

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It is often quoted on here that landlords selling means that their tenants will buy the houses being sold - but is that actually the case?

Obviously someone will buy the house - but how much pent up demand is there in the system? How many people living with their parents with a stack of cash in the bank? How many divorcees-to-be are waiting for the opportunity to split. How many are flat sharing because they don't currently see value in buying even though they could do? How many people will think that they can now afford to have a spare bedroom?

There is, I think  a potential problem that these houses will be sold - but not to the people currently living in them. Is the population gaseous - i.e. will it spread out to occupy the space available to it?

I know there are some tenants that prefer to rent, but the majority would buy but can't. The prices will fall, but will they fall far enough for the current tenant to buy (in my view 50%), or will the pent up demand step in before they get that low?

Tenants may actually end up with the same number of people chasing fewer rentals. Or the above could be complete tosh. But it has worried me for a while. 

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33 minutes ago, CunningPlan said:

It is often quoted on here that landlords selling means that their tenants will buy the houses being sold - but is that actually the case?

Obviously someone will buy the house - but how much pent up demand is there in the system? How many people living with their parents with a stack of cash in the bank? How many divorcees-to-be are waiting for the opportunity to split. How many are flat sharing because they don't currently see value in buying even though they could do? How many people will think that they can now afford to have a spare bedroom?

There is, I think  a potential problem that these houses will be sold - but not to the people currently living in them. Is the population gaseous - i.e. will it spread out to occupy the space available to it?

I know there are some tenants that prefer to rent, but the majority would buy but can't. The prices will fall, but will they fall far enough for the current tenant to buy (in my view 50%), or will the pent up demand step in before they get that low?

Tenants may actually end up with the same number of people chasing fewer rentals. Or the above could be complete tosh. But it has worried me for a while. 

Who are the sellers?
Leveraged and afraid of being pushed to higher taxes.
Will they have enough reserves to evict the tenant and sell?
Will buyers from the demographics you mentioned afford to buy a property with a tenant in situ?

I don't have answer for these either. But, It's going to be a rollercoaster ride for the next 3-6 months.

Just to balance it, I know a guy who is leveraged with 4 properties in SE, started to worry about his EE tenants (most are in min wages relying on TC) position after March. 

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1 minute ago, hi5lo5 said:

Who are the sellers?
Leveraged and afraid of being pushed to higher taxes.
Will they have enough reserves to evict the tenant and sell?
Will buyers from the demographics you mentioned afford to buy a property with a tenant in situ?

I don't have answer for these either. But, It's going to be a rollercoaster ride for the next 3-6 months.

Just to balance it, I know a guy who is leveraged with 4 properties in SE, started to worry about his EE tenants (most are in min wages relying on TC) position after March. 

Fair questions. I guess we actually need to 'persuade' a lot of EU 'workers' to go home to free up the housing for the displaced tenants. I think we can all agree it will be messy.

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45 minutes ago, CunningPlan said:

It is often quoted on here that landlords selling means that their tenants will buy the houses being sold - but is that actually the case?

Obviously someone will buy the house - but how much pent up demand is there in the system? How many people living with their parents with a stack of cash in the bank? How many divorcees-to-be are waiting for the opportunity to split. How many are flat sharing because they don't currently see value in buying even though they could do? How many people will think that they can now afford to have a spare bedroom?

There is, I think  a potential problem that these houses will be sold - but not to the people currently living in them. Is the population gaseous - i.e. will it spread out to occupy the space available to it?

I know there are some tenants that prefer to rent, but the majority would buy but can't. The prices will fall, but will they fall far enough for the current tenant to buy (in my view 50%), or will the pent up demand step in before they get that low?

Tenants may actually end up with the same number of people chasing fewer rentals. Or the above could be complete tosh. But it has worried me for a while. 

Me for one, I am a tenant waiting to buy. I have a reasonable deposit and a good income, but I am not willing to buy at the current prices.

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2 hours ago, hi5lo5 said:

Nope its even better.

For managed Lettings the Agent has a report the LL details to HMRC.

For self managed there are two ways.

1. Council of Mortgage lenders and HMRC have an agreement to share the data between them, primarily this was done in the interest of Mortgage Lender to verify the Income of the applicant(s).

2. HMRC can request data from all deposit protection schemes.

 

Don't forget they can also be reported to HMRC via the online forms, well worth doing if you know any LL's, even if you've got no solid evidence they're not declaring income it's worth adopting a policy of guilty until they can prove themselves innocent imo.

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17 minutes ago, hi5lo5 said:

Who are the sellers?
Leveraged and afraid of being pushed to higher taxes.
Will they have enough reserves to evict the tenant and sell?
Will buyers from the demographics you mentioned afford to buy a property with a tenant in situ?

I don't have answer for these either. But, It's going to be a rollercoaster ride for the next 3-6 months.

Just to balance it, I know a guy who is leveraged with 4 properties in SE, started to worry about his EE tenants (most are in min wages relying on TC) position after March. 

An owner occupier would not get a mortgage on a place with a sitting tenant 

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14 minutes ago, CunningPlan said:

Fair questions. I guess we actually need to 'persuade' a lot of EU 'workers' to go home to free up the housing for the displaced tenants. I think we can all agree it will be messy.

I meant , it all depends on what benefit rights the EU workers might have post Brexit.

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I think here in NI the 60% drops enables owner occupiers to buy up the repo BTL stock. Of course there's a large number of can't buy no matter how far they drop but myself and plenty of my friends were able to jump in when prices dropped to more "reasonable" levels. I certainly didn't have to compete with BTL like I would have in 2006. 

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I guess that if a lot of landlords were to evict tenants, start to sell, or try pushing up rents at roughly the same time, then that would lead to voids, and so there would be a temporary fall in the number of houses available for rent (indeed the total number of occupied houses). That would be a pain for us renters both ways, as we'll get the disruption of moving and then be looking for a new place in a squeezed market. However, it would be temporary, and I don't for one moment believe that landlords are able to organize enough to give any significant degree of cooperation. I say that because the changes come in fairly slowly, rental contracts are spread through the year, and collective action in general (such as strikes) needs people to make a sacrifice to achieve a better future - and I don't think sacrifice is baked into a typical landlord's DNA.

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