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TODAY'S OTHER NEWS

Chancellor plans another “tax attack” on buy-to-let landlords

Buy-to-let landlords could face another stamp duty rate hike in the Autumn Budget to further curb the acquisition of second homes.

The claim that the Treasury is looking for fresh ways to raise money ahead of the Budget this autumn came in political writer James Forsyth’s latest column in The Sun.

‘This [increased stamp duty surcharge] would, so the thinking goes, raise money for the Exchequer and help keep house prices down,’ he wrote.

There has been an increase in the number of buy-to-let landlords selling up and quitting the private rented sector over the past couple of years, with tax and regulation changes cited as the main reasons why landlords are offloading properties.

The now former chancellor George Osborne’s decision in 2016 to restrict mortgage interest relief to the basic rate of income tax and add a 3% levy on stamp duty for the purchase of additional homes has unsurprisingly not gone down well with landlords, as reflected by the fact that buy-to-let mortgages now make up less than 13% of all new loans, down from 17% in 2015.

A report published a couple of months ago by the RLA research exchange, PEARL, warned that the country faces a net loss of 133,000 homes for private rent over the next year.

This follows government figures showing that between March 2016 and March 2017 England saw a loss of 46,000 private rented homes.

The proposed buy-to-let tax hike is likely to be opposed by some Tory backbenchers over fears the move would result in lower revenues for the Treasury.

Two former Conservative cabinet ministers have already criticised reported plans for a further hike in the levy charged on buy-to-let purchases.

John Redwood, the former trade secretary, called the potential stamp duty hike a “tax attack” on second home owners.

He said: “There is no need to increase taxes and if you carry on increasing them you'll collect less money from people, which is the opposite of what we want to achieve.”

“The answer for the Treasury is cut stamp duty and you’ll raise more money.”

Lord Lilley, the former social security secretary, told The Telegraph that he believes the only real way to curb house price growth is to build more houses.

He said: “We just need to build more houses. We’ve let four million extra people into the country and we haven’t built enough houses for the people who are already here.”

Poll: Would a further hike in the Stamp duty levy charged on buy-to-let purchases deter you from expanding your property portfolio?

PLACE YOUR VOTE BELOW

  • Peter David

    So that'll be more rent increases on top of the ones we've already done for the section 24 tax. Surprisingly little reaction from tenants to the government's onslaught against them, via their anti landlord policies . You would have thought they'd have woken up by now. Ah well. Maybe one day.

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    When you set up a business, property letting in this case, you look at the next forty years or so and continually evaluate the future on this same basis. Twenty years ago this looked good so a lot of people set up business. Essentially a landlord is a broker who enables someone to have somewhere to live when it is impossible to buy outright or the accommodation is only needed for a short period. Yes there are disadvantages to not buying but being warm and dry is a lot more important than those.

    When I look at my next twenty years there will not be a profit because the government/council costs are rising too fast. The exact nature of the costs are irrelevant. There might be ways to avoid some of these costs but that in itself may cost money as the business is restructured.

    I am selling up. There is no point. If the tenants can not afford to buy a house - actually I do care - but there is nothing that I can do for them.

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    Agree with you who cares if tenantscsnt afford to buy. The government doesn’t so why she we shoulder the worries. When they become homeless the government will need to accommodate them without Rental accommodation that leaves hotels, think we all need to start investing in hotels

  • Peter David

    And the government get you on the CGT too. We always knew that would happen but it would be nice if we could be free to choose our own timing for liquidating assets rather than be forced to sell by anti business political diktat (and from a Tory government!). We are cashing out on a number of houses and re investing in the USA.
    No future left for business in the uk.

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    may and her cronies are not Conservatives

     
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    I was considering buying another property, but with all the extra regulation and proposed increases in tax I have decided not to bother.

     
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    There are still plenty of profitable btl opportunities around. In Glasgow a flat costing £80k can get over £6k in annual rent, yielding 7.5% gross. If fully mortgaged at around 2% Apr that still yields over 5%. Larger properties costing under £300k can get £25k annual rent or a gross yield of 8 to 9% and 10 or more groups chasing every such available rental opportunity. I don't like what Osborne has done but the squeeze on over extended landlords has helped my annual rental income grow by over 20% over the last 3 years without having to make any further Capital investment. More pain can mean more gain for those who can bear it.

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