Death of buy-to-let: landlords wake up to Osborne's 150pc ta

[bigunit00]

PurpleMoonlight said:

If I were to borrow £200,000 and invest it on the stock market, would I get tax relief on the interest?

I don't know - do you?

[Alg123]

daytona365 said:

How are those leaky borders doing ? This is THE ONLY issue of any importance facing this country. Hence this smoke and mirrors charade ? Imo.

Pretty much this! Spot on. Of course, in the eyes of lefties, saying that makes you a waaaaaacist tt.

[daytona365]

So how much are houses going to drop in price due to this then, 10% eventually/maybe. If FTB can't buy an average small house in a cheap area now for 400/450k, will they manage if they come down to 360/405k ?

[tomjol]

Alg123 said:

daytona365 said:

How are those leaky borders doing ? This is THE ONLY issue of any importance facing this country. Hence this smoke and mirrors charade ? Imo.

Pretty much this! Spot on. Of course, in the eyes of lefties, saying that makes you a waaaaaacist tt.

No, in the eyes of anyone with half a brain, it makes you a bit thick.

[bigunit00]

daytona365 said:

So how much are houses going to drop in price due to this then, 10% eventually/maybe. If FTB can't buy an average small house in a cheap area now for 400/450k, will they manage if they come down to 360/405k ?

Is it the plight of the FTB that should be driving the national tax regime? Is £400-450k really the budget of these types to get an "average small house in a cheap area"? ........maybe they need to set some realistic expectations for their first house.

[otolith]

bigunit00 said:

Is it the plight of the FTB that should be driving the national tax regime? Is £400-450k really the budget of these types to get an "average small house in a cheap area"? ........maybe they need to set some realistic expectations for their first house.

Sounds like London-centric ideas of pricing. You can get a 2-bed new build in Swindon for 140k-ish.

[Alg123]

tomjol said:

No, in the eyes of anyone with half a brain, it makes you a bit thick.

Whilst those of us with full brains, can see its part of the problem....

Edited by Alg123 on Saturday 22 August 14:44

[anonymous-user]

No, the problem is decades of spending more than our income. Leaky borders are a relatively minor contribution to that issue. Taxes up, spending down, that's the only answer.

[tomjol]

Alg123 said:

tomjol said:

No, in the eyes of anyone with half a brain, it makes you a bit thick.

Whilst those of us with full brains, can see its part of the problem....

Edited by Alg123 on Saturday 22 August 14:44

Part of the problem, absolutely.

The only issue of any importance, absolutely not.

[Alg123]

tomjol said:

Part of the problem, absolutely.

The only issue of any importance, absolutely not.

I never said it was the "only" issue. Also...

A significant rise like that thanks to labour will affect everything in some way.

Edited by Alg123 on Saturday 22 August 14:58

[tomjol]

Alg123 said:

I never it was the "only" issue.

Really?

Alg123 said:

daytona365 said:

How are those leaky borders doing ? This is THE ONLY issue of any importance facing this country. Hence this smoke and mirrors charade ? Imo.

Pretty much this! Spot on. Of course, in the eyes of lefties, saying that makes you a waaaaaacist tt.

[Alg123]

tomjol said:

Alg123 said:

I never it was the "only" issue.

Really?

Alg123 said:

daytona365 said:

How are those leaky borders doing ? This is THE ONLY issue of any importance facing this country. Hence this smoke and mirrors charade ? Imo.

Pretty much this! Spot on. Of course, in the eyes of lefties, saying that makes you a waaaaaacist tt.

Did I say that?

[bigunit00]

Here is a worked example assuming you, the landlord, pay 40pc tax.

NOW
Your buy-to-let earns £20,000 a year and the interest-only mortgage costs £13,000 a year. Tax is due on the difference or profit. So you pay tax on £7,000, meaning £2,800 for HMRC and £4,200 for you.

2020
Tax is now due on your full rental income of £20,000, less a tax credit equivalent to basic-rate tax on the interest. So you pay 40pc tax on £20,000 (ie £8,000), less the 20pc credit (20pc of £13,000 = £2,600), meaning £5,400 for HMRC and £1,600 for you. Your tax bill has therefore gone up by 93pc.
Now, say Bank Rate – and in turn your mortgage rate – rises by a small fraction, lifting your mortgage cost to £15,000, while your rent remains at £20,000.
You will have to pay £5,000 tax in this scenario, so you make no profit at all.

[tomjol]

Alg123 said:

tomjol said:

Alg123 said:

I never it was the "only" issue.

Really?

Alg123 said:

daytona365 said:

How are those leaky borders doing ? This is THE ONLY issue of any importance facing this country. Hence this smoke and mirrors charade ? Imo.

Pretty much this! Spot on. Of course, in the eyes of lefties, saying that makes you a waaaaaacist tt.

Did I say that?

Do you understand how quotations work?

[GT03ROB]

daytona365 said:

So how much are houses going to drop in price due to this then, 10% eventually/maybe. If FTB can't buy an average small house in a cheap area now for 400/450k, will they manage if they come down to 360/405k ?

Sorry but ....

[Alg123]

tomjol said:

Do you understand how quotations work?

Yes I do. And you're quoting someone else. I simply agreed with him bringing up the point about borders.

[phib]

bigunit00 said:

Here is a worked example assuming you, the landlord, pay 40pc tax.

NOW
Your buy-to-let earns £20,000 a year and the interest-only mortgage costs £13,000 a year. Tax is due on the difference or profit. So you pay tax on £7,000, meaning £2,800 for HMRC and £4,200 for you.

2020
Tax is now due on your full rental income of £20,000, less a tax credit equivalent to basic-rate tax on the interest. So you pay 40pc tax on £20,000 (ie £8,000), less the 20pc credit (20pc of £13,000 = £2,600), meaning £5,400 for HMRC and £1,600 for you. Your tax bill has therefore gone up by 93pc.
Now, say Bank Rate – and in turn your mortgage rate – rises by a small fraction, lifting your mortgage cost to £15,000, while your rent remains at £20,000.
You will have to pay £5,000 tax in this scenario, so you make no profit at all.

Great explanation, thanks.

How would the same thing work with LTD company ?

Thanks in advance
Phib

[tomjol]

Alg123 said:

tomjol said:

Do you understand how quotations work?

Yes I do. And you're quoting someone else. I simply agreed with him bringing up the point about borders.

Sigh.

Enjoy the rest of the school holiday.

[Alg123]

tomjol said:

Sigh.

Enjoy the rest of the school holiday.

Don't cry now

[LittleEnus]

bigunit00 said:

Here is a worked example assuming you, the landlord, pay 40pc tax.

NOW
Your buy-to-let earns £20,000 a year and the interest-only mortgage costs £13,000 a year. Tax is due on the difference or profit. So you pay tax on £7,000, meaning £2,800 for HMRC and £4,200 for you.

2020
Tax is now due on your full rental income of £20,000, less a tax credit equivalent to basic-rate tax on the interest. So you pay 40pc tax on £20,000 (ie £8,000), less the 20pc credit (20pc of £13,000 = £2,600), meaning £5,400 for HMRC and £1,600 for you. Your tax bill has therefore gone up by 93pc.
Now, say Bank Rate – and in turn your mortgage rate – rises by a small fraction, lifting your mortgage cost to £15,000, while your rent remains at £20,000.
You will have to pay £5,000 tax in this scenario, so you make no profit at all.

Thanks for this, makes sense now