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Landlords urged to sell buy-to-let properties now before tax bills soar in April

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Tax advisers have warned landlords to consider selling their buy-to-let properties now before a slew of new rules coming in April take a bigger bite out of their already squeezed incomes.

The incoming tax changes means property investors could be better off selling now, experts have said, despite the current weakness in the market.

House price growth has slowed to 0.7pc, its lowest level in almost a decade, according to figures released by the Land Registry last week, with prices falling by 2pc in the South East and 2.9pc in the North East. Property transactions have dropped by 12pc since this time last year.

Come the new tax year in April, however, the scrapping of valuable tax reliefs that have been available since the Eighties will result in landlords paying tens of thousands of pounds in additional duties when they eventually decide to sell.

This is the latest in a string of buy-to-let reforms that have weighed on landlords’ profits. These include the phasing out of tax breaks on mortgage interest payments, dilution of the valuable “wear and tear allowance” and tighter regulation of the eviction of problem tenants.

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Sell to other BTL landlords who were given correct financial advise to buy BTL properties through limited company. These BTL landlords are waiting on the sidelines like vultures. 

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But....but if they sell then the house disappears and the tenant will be homeless. Landlords are providing shelter by sheer kindness and need to be protected against the market, the taxman, housing charities, tenant rights.

 

Won't you think of the poor BTL!?

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5 minutes ago, Tiger1234 said:

Sell to other BTL landlords who were given correct financial advise to buy BTL properties through limited company. These BTL landlords are waiting on the sidelines like vultures. 

lolz 😁

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3 hours ago, spacedin said:

Tax advisers have warned landlords to consider selling their buy-to-let properties now before a slew of new rules coming in April take a bigger bite out of their already squeezed incomes.

The incoming tax changes means property investors could be better off selling now, experts have said, despite the current weakness in the market.

House price growth has slowed to 0.7pc, its lowest level in almost a decade, according to figures released by the Land Registry last week, with prices falling by 2pc in the South East and 2.9pc in the North East. Property transactions have dropped by 12pc since this time last year.

Come the new tax year in April, however, the scrapping of valuable tax reliefs that have been available since the Eighties will result in landlords paying tens of thousands of pounds in additional duties when they eventually decide to sell.

This is the latest in a string of buy-to-let reforms that have weighed on landlords’ profits. These include the phasing out of tax breaks on mortgage interest payments, dilution of the valuable “wear and tear allowance” and tighter regulation of the eviction of problem tenants.

The withdrawal of letting relief will have the most effect on "accidental" landlords who let out rather than sell their houses after themselves moving. For many it will have the same effect as an overnight £20k fall in the value of their property. Given how slow the professional (ho ho) landlords were to grasp the impact of s24 we can safely assume that the majority of these accidental landlords are still blissfully unaware of what is heading their way.

The Telegraph article will probably inform a few but it's now to late for most to do anything about it. Even if they now leap into action immediately giving tenants notice, getting the house back by December and quickly redecorating  to get it on the market In January the chances of having a sale completed by 5th April are remote.

 

  

  

Edited by Confusion of VIs

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12 hours ago, Confusion of VIs said:

The withdrawal of letting relief will have the most effect on "accidental" landlords who let out rather than sell their houses after themselves moving. For many it will have the same effect as an overnight £20k fall in the value of their property. Given how slow the professional (ho ho) landlords were to grasp the impact of s24 we can safely assume that the majority of these accidental landlords are still blissfully unaware of what is heading their way.

The Telegraph article will probably inform a few but it's now to late for most to do anything about it. Even if they now leap into action immediately giving tenants notice, getting the house back by December and quickly redecorating  to get it on the market In January the chances of having a sale completed by 5th April are remote.  

An acquaintance was late in getting the family's tax affairs to their accountant this year and discovered about S24 a few weeks ago... 

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6 hours ago, rantnrave said:

An acquaintance was late in getting the family's tax affairs to their accountant this year and discovered about S24 a few weeks ago... 

I know of one or two landlords who've known about it for a year or so and some of their properties have now been converted into Airbnbs.

Also no disrespect to asian landlords but I think some of them are in for a real shock as I think the rate of computer literacy is lower in their communities than others.

Edited by spacedin

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5 minutes ago, spacedin said:

I know of one or two landlords who've known about it for a year or so and some of their properties have now been converted into Airbnbs.

They are breaching their btl mortgage terms then.

If they dont have a mortgage then s24 will not affect them.

 

 

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On 22/09/2019 at 19:05, Tiger1234 said:

Sell to other BTL landlords who were given correct financial advise to buy BTL properties through limited company. These BTL landlords are waiting on the sidelines like vultures. 

Is this meant in earnest? Evidence if so?

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On 22/09/2019 at 19:05, Tiger1234 said:

Sell to other BTL landlords who were given correct financial advise to buy BTL properties through limited company. These BTL landlords are waiting on the sidelines like vultures. 

Which is why I don't have a massive problem with them. At least they they tried to create a business.

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On 23/09/2019 at 14:51, spacedin said:

I know of one or two landlords who've known about it for a year or so and some of their properties have now been converted into Airbnbs.

Also no disrespect to asian landlords but I think some of them are in for a real shock as I think the rate of computer literacy is lower in their communities than others.

Also no disrespect to asian landlords but I think some of them are in for a real shock as I think the rate of computer literacy is lower in their communities than others.

Im sure many of them live in the cash economy and rent out to immigrants and temp residents with poor English and other handicaps.  In fact I used to know one, he would never rent out to an established immigrant never mind an indigenous white man. Always took advantage of tenants, never handed bonds back either, he was proud of his behavior.   I used to work with him and due more to his  intrinsic arrogance I wrote to the tax man but nothing ever came of it.

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Speaking to an old (very old) school friend today. He moved during the 2008 crash couldn't sell his house and let it out ever since. He told me his long term tenant, 7yrs had just given notice and he was planning to do up the house after she left and get it on the market in the Spring.

No surprise that he knew nothing about the letting relief tax changes (wasn't affected by s24 as just a base rate tax payer). A quick calc later, I gave him the bad news that if he didn't complete by April and got the price he hoped for his capital gains bill would go up from nothing to about £10k.  

All a bit sad as he is a decent guy and not well off who had wanted to sell the house for years but wouldn't evict a tenant to do it.

 

 

    

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9 hours ago, Confusion of VIs said:

Speaking to an old (very old) school friend today. He moved during the 2008 crash couldn't sell his house and let it out ever since. He told me his long term tenant, 7yrs had just given notice and he was planning to do up the house after she left and get it on the market in the Spring.

No surprise that he knew nothing about the letting relief tax changes (wasn't affected by s24 as just a base rate tax payer). A quick calc later, I gave him the bad news that if he didn't complete by April and got the price he hoped for his capital gains bill would go up from nothing to about £10k.  

All a bit sad as he is a decent guy and not well off who had wanted to sell the house for years but wouldn't evict a tenant to do it.

 

 

    

Surely base rate tax payers are still affected by S24?

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On 25/09/2019 at 18:04, steve99 said:

Also no disrespect to asian landlords but I think some of them are in for a real shock as I think the rate of computer literacy is lower in their communities than others.

Im sure many of them live in the cash economy and rent out to immigrants and temp residents with poor English and other handicaps.  In fact I used to know one, he would never rent out to an established immigrant never mind an indigenous white man. Always took advantage of tenants, never handed bonds back either, he was proud of his behavior.   I used to work with him and due more to his  intrinsic arrogance I wrote to the tax man but nothing ever came of it.

Its not computer literary I worry about when when I see Mr Abdul sum. Its legal complieance  and building reg.

Seriously. Mate works in a LA. The number of problems a small section of the commuinity cause is not.

The LL register and fit n proper laws will clear them all out.

 

 

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On 22/09/2019 at 19:21, Confusion of VIs said:

The withdrawal of letting relief ...//....

The Telegraph article will probably inform a few but it's now to late for most to do anything about it. Even ///.......

  

It's "TOO LATE" --- not "to late" !!!!!!  

Grrrr....................................

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On 9/23/2019 at 2:51 PM, spacedin said:

Also no disrespect to asian landlords but I think some of them are in for a real shock as I think the rate of computer literacy is lower in their communities than others.

You really think they declare to HMRC ?  :) 

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On 27/09/2019 at 08:22, eric pebble said:

It's "TOO LATE" --- not "to late" !!!!!!  

Grrrr....................................

😊😊 If you are going to start correcting all my typos you have got yourself a full time job. 

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On 22/09/2019 at 19:05, Tiger1234 said:

Sell to other BTL landlords who were given correct financial advise to buy BTL properties through limited company. These BTL landlords are waiting on the sidelines like vultures. 

BTL mortgages are extremely difficult to obtain for a LTD company compared to an individual buyer, a company has to have to have an enormous amount of capital to provide a guarantee.

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On 23/09/2019 at 08:14, rantnrave said:

An acquaintance was late in getting the family's tax affairs to their accountant this year and discovered about S24 a few weeks ago... 

What an idiot.

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https://www.mortgagesolutions.co.uk/specialist-lending/2019/10/10/claims-companies-targeting-hmos-post-ppi-whittaker/

Keystone Property Finance CEO David Whittaker has warned brokers to be aware of claims management companies (CMCs) targeting their landlord clients.

 

Whittaker said claims firms had moved on to the sector following the end of payment protection insurance (PPI) claims in August and the introduction of licensing requirements for houses in multiple occupation (HMO).

He cited cases where CMCs had targeted tenants in HMOs where landlords had not yet secured a licence for the property.

This included five students from Leeds who reclaimed around £15,000 from their landlord who only applied for the licence halfway

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16 hours ago, Peter Hun said:

https://www.mortgagesolutions.co.uk/specialist-lending/2019/10/10/claims-companies-targeting-hmos-post-ppi-whittaker/

Keystone Property Finance CEO David Whittaker has warned brokers to be aware of claims management companies (CMCs) targeting their landlord clients.

 

Whittaker said claims firms had moved on to the sector following the end of payment protection insurance (PPI) claims in August and the introduction of licensing requirements for houses in multiple occupation (HMO).

He cited cases where CMCs had targeted tenants in HMOs where landlords had not yet secured a licence for the property.

This included five students from Leeds who reclaimed around £15,000 from their landlord who only applied for the licence halfway

I think it would be worth posting this link on various student/letting forums/Twitter pages ;)

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On 27/09/2019 at 08:04, iamnumerate said:

Surely base rate tax payers are still affected by S24?

It depends on whether the rent added to their salary exceeds the higher rate threshold. If it doesn't the basic rate payer is unaffected

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On 03/10/2019 at 16:53, maffo in oxford said:

BTL mortgages are extremely difficult to obtain for a LTD company compared to an individual buyer, a company has to have to have an enormous amount of capital to provide a guarantee.

The guarantee is a personal one rather than from the company. 

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  • 293 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% +
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      • Even
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      • up 5%



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