Monday, September 23, 2013

Yay!

Landlords with West Bromwich face tracker mortgage rise

Thousands of UK landlords are facing a rise in the interest rate charged on their tracker mortgages despite no change in the Bank of England rate. Some 6,700 landlords who hold buy-to-let tracker mortgages with the West Bromwich Building Society face a two percentage point rise on 1 December.

Posted by mark wadsworth @ 04:27 PM (3190 views)
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5 thoughts on “Yay!

  • The capital requirements are part of implementing Basel III. This is not isolated.

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  • At least they can set the interest against income unlike the poor slaves looking for a home to live in………if they bother to pay tax.

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  • Reallyneedtoregister says:

    Unfortunately, the cost increase to the Landlord in his ‘provision’ of housing will merely be passed on the the tenants. The tenants will then (of course) have to pass this on to the benefits system, which in turn will be passed on to the endeavours of yet another generation via money printing.
    Considering said Landlord will see no increase in cost (if he does actually declare his income and rake back the interest), further he has ‘purchased’ the property with free printed money in the first place , you can see why I’m so sick of the whole cyclical greed-fuelled system.
    Youth will eventually put down their Iphones, smell the coffee and protest (hopefully).

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  • RTL, of course they can set the interest cost against rental income, that makes good sense!

    An owner-occupier does not pay income tax on his non-cash rental income and so gets no tax deduction. MIRAS was a hangover from the says of Schedule A tax where owner-occupiers were taxed on non-cash rental income and accordingly got a deduction for actual interest paid (fair enough).

    The landlord collects rent, which goes three ways – partly to pay for repairs etc (and the repair man hopefully pays income tax), it goes to the bank as interest (and the bank pays corporation tax on that) and the rest to himself (and he pays tax on that). If there were no interest deduction, then that part of the rent which pays the interest would be taxed twice.

    Quite simply, if one house is landlord/tenant and the house next door is owner-occupied, then the landlord/tenant house generates more tax revenues.

    In a perfect LVT-only world, the tax bill on both houses would be exactly the same (same LVT) and all earned income (including the landlord’s return on bricks and mortar and the repairman’s repair bill) would be zero. In this scenario, nobody can deduct interest paid from their income for tax purposes because your income is not taxed.

    Sorted.

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  • That’s a heck of a jump – has anyone seen any evidence of other BTL mortgage providers doing the same?

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