Extra tax for landlords

Why? The income is the same whether the property is financed or not. The profit may vary, but that’s the same in any business. Why should someone be penalised for not financing a property by effectively paying more tax than someone who doesn’t? A non-financed property also means less pressure to raise rents, less chance of upending tenants because the mortgage rates have risen etc. I realise I’m in a fortunate position not to need to finance, but these properties have been purchased from earned income, I’m not an accidental landlord and I haven’t inherited anything. The buy to let boom was fuelled in part by the fact mortgage interest payments were deductible.

Corporate landlords do pay additional SDLT. I have a company that owns properties and I pay the additional charge. Why do you think they don’t?

Why should you be allowed to deduct mortgage interest? No one else buying a house is.

Mortgage interest deductions allow landlords to lever up more than owner occupiers and enables landlords to outbid owner occupiers. Its obvious why it should be removed, its to remove the advantage from landlords over owner occupiers.

I earnt my money through PAYE and paid tax, I then invested what I earnt into property and now my investment is being taxed again but at a higher rate of tax!

No - the only thing being taxed is new income or gains on the investment, the not the original investment itself.

You're only being taxed if the money is making you more money. The money you invested, that has already been taxed, isn't taxed again.

Here is the rub, because of people like you house prices have rocketed. Pay your way.

Yes you’re being taxed on income generated from an investment - why is that outrageous and making you want to leave the UK? If you had invested the money into shares then you’d get taxed on the dividend income too.

You’re not being taxed twice, you’re being taxed once on the new income that is generated.

They wouldn’t have to sell to a corporate landlord.

Some are
They are buying from desperate sellers that can’t shift older rental stock
They buy at a reduced price and build their portfolios

Standard houses, flats etc

This 2% increase is bad for
tenants
and
local councils
Tenants because landlords will have to increase the rent to cover it
Councils because they will need to top up rents via UC ( if within local threshold calcs)
Landlords because they could lose good tenants if they still can’t afford the increase rent if councils don’t cover it

Its quite mad

Nevertheless OP I would say that currently you do not pay national insurance on rental income

Savers also have been hit with this 2% increase making planning for the future almost impossible these days

I believe that the RRA becomes effective 5/26. Until
then your current tenancy agreement will apply so I would check if it allows rent increases. Even if not and if you do not agree with a proposed increase your L/L can serve a s13 for an increase. This is the tool that your L/L would likely have used if you had objected to the previous annual increases and your contract didn’t provide for increases.

Under the RRA, it doesn’t matter what your contract says, all
increases are triggered by a s13 notice. The tenant can challenge the increase but the tribunal will consider market rents in its decision which will be lower than or the same as the proposed rent but not higher.

Oh how are you going to magically make it possible for people to get mortgages??

they'll just get bought up by faceless corporates who will put up the rents.

Sorry for the questions, I'm genuinely curious for our situation. My understanding was that all tenancies will just go to rolling tenancies. So if a section 21 isn't filed and the tenancy just moves to a rolling tenancy without a new contract, wouldn't they just be paying what they were before? Maybe I'm missing something. I have told our landlord that we aren't paying any increase, but we are certainly not paying below market rate and they have increased it every year. I should have pushed back more last time it happened, I just didn’t fully know my rights

Not everyone can afford to buy or wants to buy.

theyll probably be bought up by commercial landlords charging a fortune for a crap service.

Same. I’m terrified my landlord will sell up too.

I would remain working, I’ve done 23 years already and have at least 16 more even if I could get my desired “retirement fund” in place. Even then I might only go part time. But I’d like the choice!

I’d also still be paying tax on the income. Oh, and 5% stamp duty (which incidentally isn’t payable on any other type of investment). And I don’t mind paying tax on the income, but it’s being taxed to the point of meaning it’s almost no longer viable for a lot of people despite hard work and effort.

You’re right, and that’s what I was getting at. We’re trapped. We’re slaves who are destined to never have a life unless we get lucky. Because responsible decision making and meticulous planning can’t make us a living! You just have to hit it lucky as a football player (if you’re male) or a pop star or something. It’s literally depressing.

They don't want people to be independent. They don't want sources of income that enable people to quit work. They need people to remain working and paying regular tax and NI. They also need people to be in debt and preferably downtrodden.

As a LL you are already being taxed on your rental income, and I have no issue with that. We're now being asked to pay 2% over the odds.

This rankles when you tend to hold rents steady for sitting tenants (as we have always done), get gas and electrical inspections done as required, move promptly when repairs are needed, only make deductions on the deposit when someone moves out when they have seriously taken the piss (I've deducted once in 8 changeovers of tenant, and that one had unpaid rent and left a shambles behind) and generally do your utmost to NOT be a shitty, money-grubbing landlord...

ETA I was a tenant for almost a decade, so I know what it's like. I also remember the better landlords with a fair degree of gratitude, and those are the ones I try to emulate.

Lloyds and Namoura Bank from Japan are hoovering up places for rent
Lloyds is now the biggest LL in the UK

I’m so worried about this. We’ve been renting from our landlord for many years now and have always been good tenants. Our landlord has been very accommodating keeping our rent under market value. If it’s no longer in his best interest to keep the house then we could potentially lose our home.

It frustrates me that the government are dead set in ensuring no one can better themselves or make a better life for themselves, while they all sit on money, investments, gold plated pensions and subsidised everything!

I live in a deprived area, I’ve worked as hard as I can all my life to get better jobs and to save, save, save. Others in a similar position to me have chosen to fritter their money, or perhaps plough it all into an expensive house or whatever.

I’ve saved mine meticulously, and have always planned to buy rental property. No desire to be a slum landlord, I want to provide comfortable housing, maintain the asset (because it would be mine ultimately so why wouldn’t I?) and be able to make my hard earned cash work for me, give me an income when I’m older so I don’t have to work into my fucking 70’s like the government want (and none of them will have to do!!). But all they do is put up brick walls to actively prevent people from bettering their lives and increasing their basic income by a little bit after a lot of hard work!

Hi OP. The additional tax continues the theme started by Jeremy Hunt whereby the perceived unfairness of income from employment being taxed at a higher rate than income received from investments and pensions. Hunt's plan was to gradually abolish NI to equalise income taxation. Reeves, being Labour, instead is increasing the tax from other income sources rather than allowing workers to keep more of there earnings.

I don't like tax increases, but I agree with the ambition to tax income from wealth the same as income from employment.

And, one final point. I don't see why landlords seem to think they should pay less tax on their income and capital gains than those who hold a portfolio of shares.

I have two rental properties which I rent at below market value and as above I will have to pass these costs on to my tenants. I don’t have an issue with the increase if I had been applied fairly but as it does not apply to corporations it is the smaller landlords such as myself who generally try to do right by their tenants who are impacted as usual

I don't agree. Look at some of the housing associations - they are shit landlords. I am no longer a landlord got out over the last 7 years. There are a great many very good small time landlords and a great many shit ones too. I'm glad I'm no longer in the game but corporate is not the way forward.

Corporate landlords= mainly housing associations. Corporate profit making landlords are uncommon, although growing in some products (not particularly market rent though)

we as a nation don’t want small time unprofessional landlords “investing” in an important business that can’t do professionally.

OP it’s 2%. Charged at your relevant rate of tax. Maybe £10,20 a month?!