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Shadow Chancellor Rachel Reeves says Labour would increase tax on buy to let properties and on investment income for landlords.
Reeves was addressing the issue of paying for long term social care, which she accused the Conservatives of planning to fund through a ‘triple whammy’ of increased National Insurance, income tax and higher council tax.
“We've said that it's not right that the only people who are being asked to contribute to the health and social care levy are those people who go out and work every day and the people who employ them” Reeves told the BBC over the weekend.
“If you get your income from stocks and shares and dividends or a portfolio of buy to let properties, then you pay no additional tax whatsoever in this health and social care levy” she told listeners to Radio 4.
Critics have pointed out that buy to let landlords are typically professionals who already work and pay tax through other means, including Capital Gains Tax on their investment properties when they sell.
The critics also says that 12 per cent of buy to let landlords are blue collar workers and seven per cent are retirees, according to recent research by the London School of Economics. Young couples make up 35 per cent of buy to let landlords in the UK.
The threat to buy to let was one of five points set out by Reeves to combat the developing cost of living crisis. Labour’s other proposals would include cutting VAT on energy bills and expanding the Warm Homes Discount.
Challenged on whether Labour’s alternative plans would raise the £12 billion required, Reeves said: “Well, there's lots of papers out there from different organisations that show you could do exactly that.
“We will set out our plans ahead of a General Election, but it's not right just to ask those people who go out to work for a living to pay higher taxes, especially at a time when the prices of everything are going up.”
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This is one of the many reasons why we got out of the rental market. We have sold up. Our investments will be leaving the country for more favourable jurisdictions. The Conservatives are no better than Labour. Taxation and regulation at any opportunity.
So, will Labour take full responsibility when btl LL sell up and there is then a housing crisis of massive proportions, as there will be so many fewer btl properties to rent? How will Labour deal with black hole of not enough private rentals to fill gap? Or would they prefer more families in temporary one room accomodation or on the streets?
This is the reason I'm selling my portfolio. It doesn't matter who's in goverment, landlords are getting hit from every corner. I'll be investing somewhere else, probably outside of the UK.
It's madness! There would be an exodus of LL's investing away from the UK, some, like us, have already started looking!
Ha! More Labour tax hilarity. Remember, these are the berks who included Rob Mariss, shadow Labour treasury spokesman, who claimed Section24 ‘couldn’t possibly’ raise rents or homelessness, immediately before both rocketed. They’re dangerous fools who would have all tenants out on the street whilst claiming how much they care about them. Madness.
As said by the comments above, we are simply viewed as sheep to be sheared. The looming EPC C disaster has set me on a path of selling up, this would simply be the nail in the already paid for and booked coffin. The govts of all colours are simply trying to deflect from their collective lack of action over the past decades, they have no clue how to sort out the housing crisis, but hitting landlords is good PR with only a few complaints (which can easily be dismissed). The tenants of the future will be in a world of financial pain, and we can all see it coming, it's so sad the govt cannot.
They just. “ Don’t get it, “. do they.
Increased costs for Landlords, like Any other business cost, gets passed onto tenants. !
They’ll just rent cap PF.,
Price caps on anything just don't work!
Energy price cap is due to rocket by £700 next month.
Market forces always win out and the end user always pays.
We have security of tenure in Scotland, rent controls will follow. History will be repeated, it’s the end for the PRS. Labour wanted to introduce the Mary Barbour Bill, now the SNP/Greens are doing it for them.
When, historically has rent control led to to the end of PRS?
After the SNP legislation came into force in December 2017 I was able to put my rents up by 30% and still have loads of prospective tenants.
Rent controls will be as successful as every other loony SNP initiative. I don't tend to increase rents for good sitting tenants but rent controls will change all that.
If they had stock to house people and had not taxed via sec 24 and all the other crap it may be a more even market, people would have more choice and it would be more stable but every government/media we have want to kick us down because we are the scum of the earth as someone above said what they going to do when they don’t have PS to house the families that they don’t because not everyone wants the responsibility or hold that owning a house is
Rent caps will lead to less maintenance and generally poorer standards. The positive side is that it will not affect many landlords for there will be very few left.
What about institutional landlords? All these high rise schemes in city centres..btr and prs…nobody gives them the same amount of bad publicity albeit they operate in the same space as most landlords…
In the end, it will depend on where the Govt. cap ends.
Historically, rent caps by Govt. start off fairly low, but over time the increases become more than that which would have been expected.
So......it will, and does, in the end, mean LLs will make more rent money than would be expected, and the Govt. will be forced to pull back, leading to the PRS business to go back to normal market forces.
Totally agree.
Look at the energy price cap.
This has meant EVERYONE pays more just to protect the indolent who won't shop around. Same happening with insurance costs where it's no longer worthwhile to shop around,so everyone ends up paying more just to satisfy some false notion of protecting the consumer
We had the tenant fees ban, so the fees were passed onto landlords who then passed them onto tenants by increasing rents, we had the deposit cap which was also passed on by increasing rents, the cost to 40% tax paying landlords with mortgages is also being passed on to tenants, as will the costs involved in up grading to EPC C, end result many landlords selling up, shortage of supply and increased rent to the poor tenant who is the one being hit , now they talk of an additional tax and even rent controls, how are the government and councils going to house all those homeless families ?
The last property I bought incurred a £7000 SDLT tax bill, that property required an investment of £60k to cover deposit and fees. Once rented out after paying fees, maintenance and mortgage it gives me a profit of around £350 per month from which I then pay 40% tax.
Any politician saying landlords are not paying their way are either liars or wilfully ignorant and certainly are incompetent.
Tax never fixes any problem other than a governments inability to balance their books. To fix the issues in the rental sector we need positive measures. Incentives for more people to become landlords would mean there are more rental properties available at a lower price. More available properties would mean landlords would (without the need for regulation) start improving their properties to compete for renters.
Labour will make things even worse, and then blame the landlords for the mess the politicians have created. This is what they do.
I agree with almost all of the above comments but when -o when is Eddie Hughes MP going to publish his long long (April 2019 when Rent Reform first announced)awaited white paper on Renters Reform. Is it to be the 12th of Never or Tomorrow Never Comes etc etc.
And the bill containing the EPC reforms was due by the end of the year - I guess no-one said which year!
Allegedly Autumn 2021 Tricia. Still waiting .....
I agree with all the comments made. It’s been some years now that I have not increased my tenants rents to the market (rental) value, but the way things are going with all the Governments constant new regulations I will soon have no choice but to do so.
Perhaps we should be exploring the possibility of selling up and investing abroad - but there still is that hefty CGT to consider.
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You really should have done that 5 years back and implemented annual rent increases. We never bothered as we and the tenants were happy. It's also a massive task across several hundred properties each year (it always seems to come around too quickly), but such is the state of things.
It would be a catastrophe if anyone taxed the PRS any more, as it would be simply unsustainable and people would be forced to sell off and invest overseas. We have been singled out and financially targeted for far too long. We cannot claim legitimate expenses any more, namely mortgages, whereby other sectors can - it is simply unfair.
It seems that our politicians are just pandering to ill informed people just to get the popular vote. Why is there this mis-apprehension that Landlord's are sitting on beaches sipping Mai Tai's, when in
reality they are mostly people who have work full/part time/retired or just investing for their retirement. We pay huge taxes and let's face it, we are the industry least likely to be tax dodgers because it isn't generally a cash based industry. In reality we probably pay the tax we owe unlike other cash based industries. They have lost interest in the fact that most people have BTL's because they decided to put their money from pensions into BTL investments instead. The governments are actively forcing people to save into pensions, so we are being penalised for providing for our retirement differently.
Instead if targeting the people who already pay massive taxes, they should be targeting those who evade taxes.
Totally agree with you Deborah!
Really interesting point about being less likely to not pay tax as we are not cash based. When you think about all the cash in hand work that goes on and the handouts that were given during Covid, LLs have really been given no help from the Govt in spite of our huge contribution to HMRC.
Another pointless politician with a totally useless PPE degree. Economics 101 - increased costs (taxes) = increased prices (rents). Landlords are exiting or consolidating more than I've ever remembered. I'm in no rush at the moment but I have earmarked a couple that are likely to be disposed of if the madness continues. Landlording in the past used to be a real business, always focused on looking after the houses and tenants. Now I seem to spend an inordinate amount of time dealing with paperwork and compliance, and especially looking over my shoulder at what the politicians are planning to throw in my path.
On the flip side, rents and demand are strong.
Deborah, exactly right we are over taxed and tax paid LL’s no doubt about it. Especially when we license a HMO property, they not only know everything about you but also about your property, every room in it and the size, the names of everyone in the property, whether there is a lender or freeholder who they are, so they contact them as well, if you have a Deposit who it’s with and how much money it is for and the annual amount of Rent they pay, it’s all at their finger tips, most payments are direct payments to your Bank so it’s all on record, if cash it has to be accounted for as they know it’s rented if any vacant period they’ll know that as well plus so many other ways of checking. The idea of taxing us more in ludicrous has that person any idea of we she’s talking about. I can’t be bothered to list all the costs, fees, charges and taxes that being imposed on us.
Further for Buy to let Mortgage’s regardless of whether you received rent by cash or transfer it has to be declared, how can you pay a lender with undeclared money, add Section 24 to really put the knife in and tax you on it all first.
The last time landlords were thrown to the wolves like this was under Harold Wilson's Labour government back in the 1970s and it took the best part of 15 years for the penny to drop and realise what a catastrophe it was for the homeless. Another point worth a mention is that the UK had a labour government from 1997-2010 and in those years chose to do diddly squat about PRS.
Harold Wilson devalued the £ in the 60s, he came on TV and told us that it'' wouldn't affect the £ in your pocket'', I can remember that as plain as day word for word, i was around 10 at the time and even at that young age I knew he was talking BS
I remember H Wilson in the 60’s in Huyton not far from Ken Dodd & his diddly men (rip all) of knotty Ash, L’pool, he had another stent as premier in the 70’s under watchful eye of Security Forces seemed too close to Moscow for comfort. I remember the pipe and the one about the pound in your pocket now looks like history is repeating it self only this time it’s the pound on your Credit Card.
I suspect this means the tax rebates given to personal landlords and increasing dividend tax. There's really nothing they can do without running into legal issues about income earned from SPVs as opposed to other corporate structures short of raising corporate tax.
The problem is if you raise corporate and dividend tax and lower NI / personal tax levels I'll just take it as a salary instead or leave it in the account until I retire abroad.
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