the0ni0nking wrote:Mike4 wrote:This effect being kicked off by the Tories when they accepted the lefty argument that landlords were "getting away with" offsetting mortgage interest costs against rental income and avoiding tax. Offsetting at one's marginal rate has now been stopped and is limited to basic rate. Further action in this direction was planned I reckon, and is a racing certainty that Labour will stop it completely using the need to bear down on "avoidance" as the excuse.
I was thinking about the way they could squeeze more from landlords (as a landlord myself - & owning the properties direct not through a Ltd Company).
Could they phase out interest relief completely - it wouldn't surprise me. & yet another nail in the coffin of non-Ltd company landlords if they do. From a purely selfish perspective, if that's all they do then it won't have a huge impact on me as I could pay off the mortgages in totality.
I'd be more concerned if they end up cutting out legitimate expenses such as repairs/maintenance from the allowances. In Spain, as a current non-resident, I'm not allowed to deduct anything from the gross rent so am paying tax on that number. Thankfully, repairs etc have cost me little over there so it's always remained cash-flow positive (helped by the fact there is also no mortgage).
But picking one property in the UK, it's interest costs are c£2k but repairs have been between£2.0k-£3.5k every year for the last 3 years. There is then letting agent fees of c£1.3k and service charges of £1.2k. I guess they could argue that individuals don't get to deduct repairs/maintenance from their tax bill for their own home so why should landlords - totally oblivious to the fact that being a landlord ties up significant capital which should be expected to generate a reasonable return.
Or they could also go after the Ltd Company set-up and change legislation there - I've no idea what % of homes available for rent are owned direct by people or owned by a ltd company.
Either way, I'm sure we're yet to witness the end of the vilification of (residential) landlords.
The problem is that although the voters are probably something like 60% property owners and 40% tenants, the vast majority of owners are not landlords and so do not care about landlord issues. So maybe 40% of voters are tenants and 4% are landlords.
I saw the trend towards demonising landlords something like 20 years ago, and started offloading my BTLs. The golden years were the 1980s and 1990s, after Thatcher's reforms, now being undone.