Biz
Volunteers
Activist
Posts:114
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| 30/06/2007 2:20 PM |
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http://petitions.pm.gov.uk/landlordspaytax/
We the undersigned petition the Prime Minister to Remove all tax
incentives and bonuses that property investors currently enjoy.
Deadline to sign up by: 30 August 2007
Category: Housing
More details: The
phenomenal rise in popularity of Buy-to-Let investment and other types
of residential investment is a significant contributor to house price
inflation. There is now an obscene divide between people who own
property as investment and those priced out of home owner-occupation
and the security that brings them and their families. Tax breaks on
property investment only add to this economic disparity and must be
removed as a minimum step towards levelling the playing field. |
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concerned
Concerned Citizen
Posts:24
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| 01/07/2007 4:50 AM |
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Looks good. Short and to the point. It doesn't give Gordon room to waffle about building affordable homes to rent as a 'solution'. I think if this petition goes live it would be possible to start a viral email campaign and get serious numbers of people signing it. You know the idea. Send it to 5 people and ask them to send it to 5 people who can't afford to buy a home.
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REI
Activist
Posts:413
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| 04/07/2007 4:36 AM |
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| What tax changes are being directly attacked and which need to be changed? Can there be changes that are applied that are both legal and which does not negatively impact other sectors?
Should we also remove the tax benefit received by owner occupants (no capital gains tax)? Would that be necessary to convince people that a level playing field is the real objective and not just singling out one minority for the benefit of another? |
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concerned
Concerned Citizen
Posts:24
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| 06/07/2007 11:57 PM |
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| Excellent - this is now live! This is just what I was looking for. I'll post this on a few bulletin boards and email some friends with it. Please others do the same. |
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REI
Activist
Posts:413
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| 13/07/2007 5:34 AM |
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The petition is pretty simple. How the tax relief is received and therefore what needs to be change can still be debated even if the petition gets wide support. Nothing specific if offered so the experts can review all the facts. The petition lets people know there is a concern without getting tied up in possible dead-end solutions.
On a related note...
There is a survey at the bottom of the home page. More or less the same topic. If you vote to have the tax relief removed you are supporting the following statement:
"Yes! Why should investors have their mortgages paid for them by their tenants *and* get tax relief too?"
Mechanically how are tenants paying the landlords mortgage? Most landlords have an interest only mortgage. The income from the tenant is taxed at source as income (PAYE). Then the tenant spends the money with a vendor (the landlord). The landlord uses that income to cover the interest charges. Assuming no pay-down of the debt we should then conclude that the tenant is not paying the landlord mortgage off.
If the landlord has no mortgage they pay taxes on the profits. If the landlord has a mortgage they pay taxes on the profit. In neither case is the rental income paying down the mortgage. Only the after tax income that the landlord has could be used to pay down the mortgage.
Level playing field might be a concern. Thinking that the landlord's mortgage is being paid for by the tenant misses the mark. |
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timbuck2
Concerned Citizen
Posts:39
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| 13/07/2007 5:40 AM |
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Always trying to send the point off track Mr.REI.
"zzzzzzzzzzzzzzzzzzzzzzz"
Not listening any more.....
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REI
Activist
Posts:413
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| 13/07/2007 6:23 AM |
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Posted By timbuck2 on 07/13/2007 5:40 AM "zzzzzzzzzzzzzzzzzzzzzzz" Not listening any more.....
For someone who is not listening it seems odd that you would take the time to listen and reply.
Your choice as to how you spend you time. If you really want to not listen then go for it. You will not need to reply to what you do not hear.
If you wanted to discuss something that is fine also.
Consistency matters. |
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timbuck2
Concerned Citizen
Posts:39
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| 13/07/2007 9:33 AM |
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ONE LAST COMMENT TO PUT THE RECORD STRAIGHT.
REI- NOT LISTENING TO YOUR PROFOUND STATEMENTS ANYMORE, YOU SEEM INTENT ON PROJECTING AN ANGLE FROM YOURSELF AND THEN CONTRIDICTING IT WITH ANOTHER PRICELESS QUOTE IN THE SAME SENTENCE AS TO MAKE SOME READERS BELIEVE YOUR SPIN.
ie:
REI YOU QUOTE >>
"If you vote to have the tax relief removed you are supporting the following statement: Yes! Why should investors have their mortgages paid for them by their tenants *and* get tax relief too?"
YOU THEN GO ON TO SAY:
"Assuming no pay-down of the debt we should then conclude that the tenant is not paying the landlord mortgage off"
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So in summary YOU put words in to our mouths then defend or make up some spin to make YOUR first statement look more logical.
I am happy to listen to everyone else with a genuine statement, your posts seem to consistently SUPPORT the BTL's obviously because YOU ARE ONE and wish to protect your own interests.
At least TTRTR COMES UP FRONT TO START WITH and doesn't hide what he is.
This site needs GENUINE posters which first present themselves as to what position they are in and then argue their case. YOU on the other hand are how shall I put it? ARE VERY SNEAKY.
But I digress, reading YOUR POSTS DRIVE ME MAD!
Not listening to YOU anymore.
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Biz
Volunteers
Activist
Posts:114
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| 13/07/2007 5:51 PM |
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Posted By REI on 07/13/2007 5:34 AM
"Yes! Why should investors have their mortgages paid for them by their tenants *and* get tax relief too?"
Mechanically how are tenants paying the landlords mortgage? Most landlords have an interest only mortgage.
Can you provide evidence of this?
If a landlord bought a property and then left it empty, they'd have the expense of paying any interest and repayment. They offset this cost by getting in tenants to pay them rent. In this respect, the tenant is paying their cost for them.
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WickedLandlord
First Timer
Posts:2
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| 02/09/2007 8:20 AM |
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What a load of garbage this petition is!!
Just encase you have not noticed, we live in a free market economy where people have the freedom to work or not to work, to rent or to buy. Not everyone wants to buy a property. Not every tenant wants to live in state controlled, shabby and under maintained social housing. Many tenants actively seek out private rented accomodation because it is easy to access, usually good quality and well maintained, and far away from the social problems that affect much social housing. For some problem tenants that have been evicted by social landlords, the private landlord is their only option!!
If you are trying to drive private landlords out of the market, this measure will only have an impact on the minority of landlords who are fully stretched with high loan-to-value mortgages. Most landlords invest for the long term as part of their pension strategy - we already buy these houses out of our taxed income, and any profits on the re-sale of the houses are subject to CGT. Any trading profits are also taxed.
I have modelled the impact of removal of mortgage interest tax relief on my property portfolio and it will be minimal - it will certainly not force me to sell. I believe that this measure will probably force rents up, if it succeeds in forcing some landlords to sell, so overall it will be either nuetral or positive to me.
In addition, it will restrict the free choice of many people who do not want to buy.
If you really want to reduce the size of the buy to let market, then you must address the underlying drivers, which is the destruction of private sector pensions by Gordon Brown and his Labour Party. The unintended consequence of his 1997 £5 billion/ year raid on private pensions was the growth of buy-to-let.
If your petition succeeds, there will be damaging unintended consequences, which will only appear over time. Also, if you are really so interested in making more hoousing available, then why not address the draconian planning system, or the high levels of immigration since 1997? The impact of Buy-to Let is tiny compared with these drivers!!
PS: Is your petition also designed to address social landlords? If not, then why not?
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Magrathea
Activist
Posts:435
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| 02/09/2007 9:34 AM |
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There is a place for landlordery, unfortunately the present system is allowing many landlords to simply free-ride on the imposition their ownerships create, rather than rewarding them for any meagre services they actually render to anyone. You wont be able to increase rents unless the market conditions are correct, for the same reasons that you can't simply arbitrarily increase your wages at a whim or because you have an extra cost. You have a rather novel definition of choice, let me put it to you that monopolising real estate is actually removing people's choices systematically so they have to pay you for something they would be able to supply for themselves, if you weren't. And so it is a matter of choice, and unless what you have added in value to with your landlordery is greater than the value you have prevented others from having in your absence, then your actions are reducing choices, not increasing them.
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REI
Activist
Posts:413
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| 02/09/2007 10:14 AM |
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Sorry for the late reply. I check news posts since my last visit but I must have missed this thread.
Posted By Biz on 07/13/2007 5:51 PM Posted By REI on 07/13/2007 5:34 AM
"Yes! Why should investors have their mortgages paid for them by their tenants *and* get tax relief too?"
Mechanically how are tenants paying the landlords mortgage? Most landlords have an interest only mortgage.
Can you provide evidence of this? If a landlord bought a property and then left it empty, they'd have the expense of paying any interest and repayment. They offset this cost by getting in tenants to pay them rent. In this respect, the tenant is paying their cost for them.
In the sense that a person buying milk at Tesco is paying off the mortgage on the store or otherwise paying Tesco's debt (debt raised to fund the business) then I agree that the tenant is paying the landlords mortgage.
It is a free market and the tenant has chosen to move into the property. The tenant has other choices. Hence any one landlord must compete in the market for tenants and the tenants are paying what they consider the market price.
If we are trying to change from a capitalistic model for the open and fair trade of goods and services then fine. We just need to change the title from PricedOut to something else.
If we are only talking about the ability to buy a home then why does it matter how business people receive income when they provide a service to the market?
There is nothing special in the tax code for landlords. There is a special exemption for owner occupants. All businesses deduct interest paid against gross income to produce a net figure and then compute taxes on the net. |
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WickedLandlord
First Timer
Posts:2
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| 03/09/2007 12:52 AM |
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| If this petition succeeds, and buy-to-let is made unattractive as a pension option, one of the unintended consequences will be a tsunami of pension money into traditional private pensions, all qualifying for significant tax reliefs, resulting in a big drop in tax receipts – a far bigger drop than any tax increase from the change advocated in this petition! I am sure that the treasury is aware of this threat! |
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SphincterMerkin
First Timer
Posts:4
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| 18/09/2007 9:09 AM |
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| IF THEY STOP TAX RELEIF THEN WHY DONT WE PUT UP RENT SO WE CAN STILL MAKE BIG $$$!!! IS GUD CUZ IS A CAPTIVE MARKET AND IF TENENTS WERNT SO THICK THERED BE ON THE PROPERTY LADER BY NOW!!! |
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Biz
Volunteers
Activist
Posts:114
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| 18/09/2007 12:19 PM |
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This petition received 319 signatures - many thanks to all who supported it.
A similar petition here runs until July 2008.
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Biz
Volunteers
Activist
Posts:114
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| 20/09/2007 11:06 AM |
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This petition received enough signatures to attract a response from the Prime Minister's office:
"Owner-occupiers already receive a more favourable tax treatment than
those letting or renting residential property because individuals'
principal private residences are not subject to income tax or
corporation tax on rent returns or capital gains tax on housing sales.
However, the Government keeps all taxes under constant review.The
Government recognises the difficulties faced by first time buyers and
is acting in several ways to alleviate these pressures. Firstly,
in Budget 2005 the Government doubled the starting threshold for stamp
duty to £120,000, thereby focusing support on first time buyers and
those on low incomes. In Budget 2006 the Government raised the
threshold again, to £125,000. As a result of these changes an
additional 400,000 homebuyers per year will now pay no stamp duty.
Currently, just over half of all first time buyers pay no stamp duty
and, within all homebuyers, over eighty percent pay only the 1% rate or
are exempted by the starting threshold. Secondly, the
Government's response to the independent Barker Review of Housing
Supply, published alongside the Pre-Budget Report in 2004, set out how
achieving the Government's aim to improve affordability for future
generations of homebuyers will require housing supply to become much
more responsive to demand. In the recent Housing Green Paper the
Government raised its ambition for housing additions to 240,000
dwellings a year by 2016 up from the target of 200,000 set in 2005 and
compared with around 185,000 now. This increase will be achieved
through further planning reform and continued significant investment in
the social, transport and environmental infrastructure necessary to
support sustainable housing growth. Finally, through measures set
out in the Shared Equity Task Force Report - published at Pre-Budget
Report 2006 - the Government expects 160,000 households to be helped
into home ownership through private or public shared equity products by
2010, double its original estimate." |
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newmand
First Timer
Posts:1
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| 21/09/2007 6:50 AM |
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Surely our tax system should provide equality amongst investors and taxpayers. Why can't I as a private share investor borrow money and invest the money in the stockmarket and the interest that I pay on the loan be offset against the dividends, with tax payable only on the balance dividend income? I would then be receiving the same tax treatment as the Buy to Let investor.
Should the Buy to Let investor put forward the case that they are providing a social need by supplying accommodation then I equally could argue that by investing in Companies I am also providing a social need by creating employment and by making ethical investments supporting green technology etc. I feel this should be the argument that should be put to the Government.
If private investors in the Stockmarket were able to offset the interest payments on borrowed money against their dividend income then imagine the boost that this would give to the Stockmarket in exactly the same way that we have seen such a surge in house prices.
Capital gains tax is payable by the private stockmarket investor and therefore there is no reason why we should not have the same treatment as Buy to Let investors by offsetting interest payments on borrowed money against dividend income. In fact , I should also be allowed to offset the cost of investment software programmes against dividend income in the same way that the Buy to Let investor can offset maintenance costs against rental income.
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aem
First Timer
Posts:1
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| 21/09/2007 9:20 AM |
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Re the tenant-paying-landlord's-mortgage-business, are we not splitting hairs in order to put them back together again? Yes, an interest-only mortgage does not pay off capital and yes, many landlords do go for interest-only mortages, but I think to conclude, as REI does, that tenants are not therefore paying off the mortgage with the rent that the landlord uses to fund his mortgage arrangements is an extremely nice point - and certainly one that is not appreciated by most landlords, who certainly believe their tenants are paying off their mortages! Correct me if I have misunderstood this.
Also, on Biz's point re the prevalence of interest-only mortgages, no there is no evidence, but given that only interest payments are eligible to be deducted from rental income, a decent tax accountant will tell landlords to shift their mortgages around so that their own home's mortage is as heavily repayment-based as possible and the buy-to-let property is as interest-heavy as possible; same payments, higher tax breaks. |
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quattro
First Timer
Posts:2
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| 22/09/2007 4:37 AM |
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| Basically anything that has caused house prices to increase at the rate it has in the recent past should be stopped and this is a small step on the path to that end. |
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quattro
First Timer
Posts:2
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| 22/09/2007 4:37 AM |
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| Basically anything that has caused house prices to increase at the rate it has in the recent past should be stopped and this is a small step on the path to that end. |
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