Reply to: Buy-to-let investors: 'Let us off capital gains tax and we'll sell to first-time buye

[PurpleGorilla]

BTL are bottom feeders (broadly) so going for the same flats and houses that FTB would want to buy.

As for capital gains tax - if you are Lower threshold its 18%

I pay more VAT for a packet of biscuits.

[meridian]

that does seem to be the thrust of your argument that BTLers are holding back houses. Its a small part of the market and many of the people that rent cannot buy for many reasons.

It's a relatively small part of the overall market, but a large part of the non-owner-occupied market:
https://www.gov.uk/government/statis...n-england-2014

[vetran]

I'm not looking to punish them at all. Unless you see paying capital gains tax on capital gains as a punishment.



Your argument appears to be based entirely on the premise that if BTLers sell, the only people in the marketplace that will buy are foreign investors that will leave properties vacant. I don't happen to believe that this is the case. There are plenty of people right now waiting to buy and what they need is the housing stock. If this stock becomes available through BTLers deciding to sell because it's no longer economically viable due to the tax changes and their own over-leveraging, and they pay tax on the capital gains as a result, then it's a double-win as far as buyers and taxpayers are concerned. The BTLer will also have made a profit (that's the capital gain that they've made and had to pay tax on) so everyone's happy.

that does seem to be the thrust of your argument that BTLers are holding back houses. Its a small part of the market and many of the people that rent cannot buy for many reasons.

I'm just saying be careful what you wish for, many may not sell, may decide to convert or upgrade using their rental income or similar pushing many properties out of first time buyers reach. Rental costs will also spiral.

Revealed: How foreign buyers have bought £100bn of London property in six years | London | News | London Evening Standard

[meridian]

Yes they pay CGT if they sell, the likelihood is some will sell due to the suggested tax change. If you feel your aims are best served by punishing them then good for you.

I'm not looking to punish them at all. Unless you see paying capital gains tax on capital gains as a punishment.

They can sell as a result of the tax change, now if you want to maintain the housing stock and not end up[ with lots of homeless renters you want to convince BTL landlords to sell to first time buyers not Chinese investors who will leave them empty.

If you think suggesting an incentive for selling to first time buyers is a bad thing then don't bother, just watch the rental stock disappear - I don't care I have a nice big house, the less houses that people can access will drive the value of my properties up. Soon it will be £2M for a garage anywhere in the UK.

If you want cheaper rentals prevail on the government to build more houses and keep the ones that exist occupied. If they decrease the number of people able to buy them then less will be built and if they dissuade UK landlords then most of the rental properties will become foreign investments.

Your argument appears to be based entirely on the premise that if BTLers sell, the only people in the marketplace that will buy are foreign investors that will leave properties vacant. I don't happen to believe that this is the case. There are plenty of people right now waiting to buy and what they need is the housing stock. If this stock becomes available through BTLers deciding to sell because it's no longer economically viable due to the tax changes and their own over-leveraging, and they pay tax on the capital gains as a result, then it's a double-win as far as buyers and taxpayers are concerned. The BTLer will also have made a profit (that's the capital gain that they've made and had to pay tax on) so everyone's happy.

[vetran]

Only if they sell



Both sides are being equally emotive - at the first signs that their business model of "borrow to let" means that they will be taxed, the response from the BTLers is an emotional "if you let us off the tax on our unrealised capital gains then we'll consider selling to first-time buyers".

BTLers have been relying on capital gains for well over a decade, and now that the chickens are coming home to roost and they have to pay tax on those gains they are trying to wriggle out of it.

Yes they pay CGT if they sell, the likelihood is some will sell due to the suggested tax change. If you feel your aims are best served by punishing them then good for you.

They can sell as a result of the tax change, now if you want to maintain the housing stock and not end up[ with lots of homeless renters you want to convince BTL landlords to sell to first time buyers not Chinese investors who will leave them empty.

If you think suggesting an incentive for selling to first time buyers is a bad thing then don't bother, just watch the rental stock disappear - I don't care I have a nice big house, the less houses that people can access will drive the value of my properties up. Soon it will be £2M for a garage anywhere in the UK.

If you want cheaper rentals prevail on the government to build more houses and keep the ones that exist occupied. If they decrease the number of people able to buy them then less will be built and if they dissuade UK landlords then most of the rental properties will become foreign investments.

[meridian]

currently they pay capital gains tax ,

Only if they sell

the suggestion that due to a radical change in taxation to their business model many may wish to exit BTL and if the government don't want all the BTLs flogged to a tax haven and left empty then they should make it attractive to sell BTLs to first time buyers.

The response seems to be an emotional "BTL landlords should be strung up the filthy capitalists" rather than a pragmatic well why don't we give them a tax incentive to get them to sell to first time buyers that makes sense.

#TurkeysVote4XMAS

Both sides are being equally emotive - at the first signs that their business model of "borrow to let" means that they will be taxed, the response from the BTLers is an emotional "if you let us off the tax on our unrealised capital gains then we'll consider selling to first-time buyers".

BTLers have been relying on capital gains for well over a decade, and now that the chickens are coming home to roost and they have to pay tax on those gains they are trying to wriggle out of it.

[vetran]

Didn't you read the title of this thread?

currently they pay capital gains tax , the suggestion that due to a radical change in taxation to their business model many may wish to exit BTL and if the government don't want all the BTLs flogged to a tax haven and left empty then they should make it attractive to sell BTLs to first time buyers.

The response seems to be an emotional "BTL landlords should be strung up the filthy capitalists" rather than a pragmatic well why don't we give them a tax incentive to get them to sell to first time buyers that makes sense.

#TurkeysVote4XMAS

[meridian]

so they don't pay income tax on profit or capital gains on sale?

Didn't you read the title of this thread?

[vetran]

But the invest - mortgage - reinvest model has meant BTL hadn't paid any tax!

THAT is the big problem!

so they don't pay income tax on profit or capital gains on sale?

[vetran]

Here is an idea. Could two single persons on JSA , live in each other's house and pay each other's mortgage.

not if you are closely related apparently but it seems to happen with those in large families.

[PurpleGorilla]

It is - puts you off from continuing to make more money

But the invest - mortgage - reinvest model has meant BTL hadn't paid any tax!

THAT is the big problem!

[AtW]

It's tough when you're rich and have to pay a lot of tax, isn't it?

It is - puts you off from continuing to make more money

[d000hg]

It's tough when you're rich and have to pay a lot of tax, isn't it?

[AtW]

Lots of people can't afford to pay high rents. So the government pays it for them.

Lots of people have to forfeit their future in order to afford current rents and other essential living costs - gas, electric, food, transport.

Not many of them get anything from Govt other than high taxes.

[d000hg]

When I claimed JSA for 3 weeks a couple of years ago I think I could have had £500pm as a single person for the rent, which is ~80% of what I actually pay for a 2 bed house. But then if they'd said I could have £0pm and I'd had to go and live with my Mum or something, then there would have been one extra house free.

Not wanting to sound like an attack on benefits scroungers, but clearly it's a factor.

I think quite a lot of people do that voluntarily; but making it the law sounds a bit of a hassle to enforce. Nobody should be required to take you in just because you're related to them and if the law says "you only get benefit if nobody will put you up" you say "nobody will put me up" chasing it up would not be easy.