To think people who own more than 3 properties should have a special tax applied to them?

[Calltheguards]

I'm just thinking with the housing crisis, should people really own more than 3 properties? I would assume it's a property portfolio and used to exploit renters. AIBU to think there should be a special tax applied to property owners who own more than 3 properties? Maybe tax them at a really high rate to discourage people from hoarding property.

YABU. This idea risks putting more than a few people in very horrible, heartbreaking situations under more distress and would need to deal with a lot of awkward situations like people kinda owning part of a house. It won't get empty properties back any faster.

The idea that anyone who has 3+ properties is automatically someone who is a ~parasite~ amassing holiday homes and BTLs or leaving properties empty for profit somehow I guess ignores how many people end up with that many. All the people I know in that situation have been either the executor of wills having to deal with property or the beneficiary of one and, not surprisingly - especially if someone has multiple family deaths in a short time and multiple people have a share in the house - it can take quite a while before any of the property could be sold even if there was a 'special tax', that wouldn't get that property out there any faster, it would just cost her more money. Personally, having a family member who is having to deal with multiple people's property after having their parents and sibling die all within a few years of each other, I'm quite happy for her to take as much time as she needs and really don't want anything that would make this harder on her.

I could just about see the argument for people who buy 3+ properties for personal use and maybe even better regulations around rents (because, even without BTL landlords, some people want and/or need to rent), but there is already a lot of taxes and fees around property & there are plenty of people dealing with 3+ properties who are already dealing with a lot and really shouldn't be called parasites. And I've been a renting my entire adult life.

sergei Are you a university lecturer by any chance?... 'and you are certainly arguing for the imminent collapse of the economy' ...

Am I? The idea that 'ave a go amateur Landlording should be heavily discouraged will bring about an economic collapse?

" housing markets slow and stagnate in times of economic uncertainty". You could also say "Times of economic uncertainty slow housing markets".

However, I still can't see what that has to do with discouraging small scale amateur Landlording. If you believe that a clamp down on the divisive nature of encouraging haves over have-nots regarding housing will cause an economic meltdown, you already have you answer. If that is all you believe is keeping the economy afloat, we need to 'diversify'!

Please explain.

Or are you replying to the wrong poster?

BiBabbles _ I imagine there could be something in the legislation, some exclusion clause, that didn't impact upon the executor of a will

Landlords already pay tax on rental income.
Also, if they decide to sell they will have to pay capital gains tax on the profit of the sale (you’re only excluded from this if you can prove you’ve lived in the house you sold within the last 18 months)
Plus, there will always be a market for people who would rather rent. If there were fewer landlords buying fewer properties then demand would be higher than supply - which would probably force rent up.

They do already.

The amount of stamp duty you have to pay for additional properties is disgusting.

If they rent them out then the amount of tax they pay on the earnings can really mount up.

There is a way to be a property investor AND be ethical. Lease your property to a housing association or direct to local authority (different parts of the country have different schemes) and they then use it to house their homeless. It's called private sector leasing. You lease it for a set term (usually 2-5 years) get guaranteed rent with no voids for the whole term (albeit around 15% below "market rent"), have zero involvement in the day to day faff of being a landlord (they take care of repairs, tenants, gas checks, inspections etc) and then you get the property back at the end of the term in the same condition as when you leased it out.

I own 5 properties. I live in one. I rent the rest. It is what my family lives on. I rent to students who need temporary housing, people who don’t want to own (for example a couple on secondment from another country for 18 months), people who can’t afford to buy, and people who just like the freedom of being able to move easily. How am I exploiting these people? How am I hoarding properly? I pay tax in my income. I upgrade and repair the properties as needed. I provide a place for people to live, they pay me for that place. What exactly is wrong with that?

pip because half the reason house prices are so high are because people like you buy multiple houses so prices increase, and then rent them out at high prices so no one can afford to save up money to get a deposit.

Do you really think you're doing people a favour or something?

@Calltheguards complete jealousy. They get taxed a lot already, they're providing a product that's in demand.

You make your own choices, I have worked hard and saved up a deposit since I started working from the age of 16years old and saved and saved until I can afford a small
property myself.

You don't know people's situation, they have worked hard to get to the position they're in. Yes the housing market is hard to get in, but it's doable if you work hard enough. Just because you haven't made the right choices to be able to buy your own property don't get jealous of others.

Complete ignorance and expectation of things to just be given to you.

Dh is a professional landlord. He is taxed A LOT. He is also an excellent landlord and when he advertises a property for let often gets 20+ enquiries within the first 24 hours. When the new tax changes were proposed he decided to reduce his portfolio and attempted to sell quite a bit of property. 1 sold. Viewings were far and few between. This is not because they were overpriced but because he rents to low income individuals/families and people that would want to live in the properties cannot afford to get on the housing ladder and those who could afford it don’t want to live in the areas he owns in. He is far from a parasite and actually providing a service that people clearly need.

Typical post from someone who hasn’t bothered to learn the practicalities before spouting off.

Landlords are taxed to the hilt anyway.

Have you heard of higher rate stamp duty, the loss of landlord tax incentives, income tax...? No?

@Milajah I'm not a lecturer?

The benefit of property investment to the economy is not singular: landlords not only have greater taxation dues (£16.1bn a year), but they also tend to have greater expenditure in the economy. This contributes through VAT, but also by boosting revenue in local economies - specifically relevant to the typical " 'ave a go amateur Landlording" you claim as your example - who aren't keeping this income abroad and out of reach of HMRC. These injections into the economy have a significantly higher multiplier effect that provides substantive benefits for all through recirculation. The extent of these depends on the type of expenditure, so won't be able to provide a statistic here. With a housing crash would come a credit crunch too, and that isn't something that would benefit anyone. I don't want anyone to struggle through a full and rapid enforced restructuring of the economy, and hope I'm not alone in that.

The direction of causality argument is valid, but doesn't help your position. Because removing or significantly limiting BTL in the economy would not boost housing markets, but would instead likely bring on a structural recession, this would mean that economic uncertainty, a broken housing market, and all of the other joys associated with downturns would occur regardless of the route of the causal relationship. (And as to the direction, it's likely reciprocal)

What I'm saying is that placing a significantly greater tax burden on BTL landlords would not generate any benefit for existing tenants, while also damaging the economy significantly. This is unequivocally a negative for our country, with international ramifications. If you genuinely want the result of people being able to afford deposits, it's likely that mortgage industry regulation is the appropriate avenue. If you want a more diverse economy, I don't disagree at all - but that has nothing to do with BTL, and the suggested tax would not generate this result and may even do the opposite.

Can we apply the same to cars to? My car is pretty crap compared to my peers and I’d like an upgrade at their expense.

Apparently I'm jealous of myself since I own property.... OK then 🤦‍♀️

Anyways, it's worse for the environment!

You have someone who decides to run a little AirBnB empire and creates an exceptional new demand by swallowing up local property and having the ability to do so with all the equity they accumulated. This forces essential workers to commute because they are priced out of the housing market where the jobs are located. It forces a demand for more homes to be built and green belt is taken away from the local ecosystem.

@Calltheguards what property do you own?

what property do you own?

This is a very stupid question to ask on an internet forum.

I do love it when an op comes up with a bonkers plan and then when shown it's bonkers, clings to it for dear life anyway.

Totally entertaining. 🤣

@Calltheguards

Arguably Airbnb also brings tourists to the area, who spend in local shops, supporting local businesses and thus helping the economy.

Great argument.

I’m a landlord and I’m laughing all the way to the bank. It was a great day when all that money fell out the sky

Cmon op tell us. What's driving this madness.🤣

Are you priced out of your preferred area? Do you know someone with three properties and are really jealous? Do you not like your home and would love to upgrade and want someone to blame? Are you secretly renting and don't want to admit it?

Cmon, give...

I don’t understand the housing market crisis argument. My second property that I rent out is not in a particularly desirable area and there are plenty of similar properties currently on the market and not selling cause the housing market is slow here atm.
Surely the problem is a lack of affordable housing and for that shouldn’t we be looking at large developers. There are several developments around me at the moment with houses costing from about 250k up. Shouldn’t developers be encouraged to build more affordable homes as £250k is hardly easy for many first time buyers to reach.
I don’t think you can tar everyone with the same brush.
As for taxes, we have paid huge amounts of stamp duty, get taxed on all income from the rent, etc.

Why should we not have a property portfolio? We own them all outright and pay a significant amount of tax through the business. What would you suggest we do with the properties, all of which have people living in them or for the holiday rentals, have bookings for the next 12 months?

A housing crisis??? OH yay other people's misery! OP is BONKERS 😂😝🤑🤑🤑

You all are sooooo right.

How is making it harder for the most vulnerable in society to find housing going to help things?

Shouldn’t developers be encouraged to build more affordable homes as £250k is hardly easy for many first time buyers to reach.

You have to give them something in exchange for doing what would normally maximize their profits, like zoning changes to allow for smaller lots, tax incentives, etc. But it is possible, happens all of the time in NYC. A typical deal would be allowing a developer to add 10 floors to an apartment building in exchange for reserving some of the units for low income tenants.

It's entirely down to the sell-off of council housing in the 1980s.

There's not enough affordable housing and so private landlords are able to get away with charging higher and higher rents.

If the government were to invest in more social housing, there'd be less need for private rental homes, therefore making it less appealling as an investment.

It's no good blaming individuals for taking advantage; it's the whole system that's wrong.