Extra tax for landlords

[Another2356]

Here is the rub, 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! This does not feel fair and whilst in the past I’ve provided property at below market rates, moving forward I will not. Adjustments will now be made and hence again tenants will be impacted. Over the last 9 years, any rent increases I have made have simply covered the extra cost of managing a rental (tax, regulation & maintenance) my net profit has not increased, although the rents have. It’s the government who are creating the rent increase problems.

No they will be bought by investors who will increase the rent substantially.

OP, I am in exactly the same position. I’m about to check average rentals for properties similar to mine and then increase the rent.

I have no doubt there are many crap landlords but we aren’t all crap.

Labour have pushed this cost on to the tenant. It’s obvious this will happen but they’re too thick to see it.

Landlords are such an easy target, aren't they. Let's introduce a new law which means landlords can't give notice to their tenants and increase tax even more. What a fantastic idea! They haven't learnt from what happened last time which resulted in an unprecedented number of landlords selling up. Now will be even worse. More that will sell and the rest will up the rent...and the winners are....oh yes, large families in council housing!

I'm also a landlord renting out at below market rent ( on average 25% per month below). I will now put up the rent as I have no choice with new legation coming and in and higher taxes.

Legislation!

It would be fair if mortgage interest could be deducted first.

Are there any landlords on mumsnet who actually charge the going rate?
Or is every one of them selflessly benevolent?

You will end up with a big huge asset at the end of all of this, though, so I think it is fair.

@HellsBallsYes I do on my other properties as they have come up for renewal. It’s not about being selflessly benevolent it’s about good tenants who stay and look after your property worth much more than increasing the rent to market value every year.

Not always.
I always valued good tenants over higher rent.
Until a ‘friend’ of an existing tenant moved in and was trouble.
Between a bad tenant and taxation, I ended up selling at a substantial loss. My pension and savings went up in smoke.
Sold to an investor who didn’t even live in the country. If the buyer treated the tenants the way he treated the sale, he has crammed four people into a two bed and tripled the rest.

Corporate landlords will be much better imo. They will have financial resources and management structures in place to properly manage properties.

I rented during my 20s and the vast majority of private landlords rent out absolute shit holes and don’t properly maintain them at all. We really need to stop pretending that they are offering kind of social service by renting out properties. The sooner they exit the market the better.

This ^
Sell up if your investment is no longer making you enough money. You haven't lost money, you've got the value of a house 🤷

Im amazed at the amount of 'below market value' landlord I read about on here. After 30+ years of renting we've never met one!
Thinking that us renters will lose the personal touch of a local landlord compared to a big company is laughable.
My landlord lives in the next street and won't come amd fix our fence til it 'Blows down completely' 🙄

Exactly.

Landlords are making an income through rentals. The boom days are over. If so many hadn’t been slum landlords for so long it wouldn’t have come to this. Some of the best family homes in my city are carved up into HMOs, if more go back on the market there is a chance families can own them again.

Keep telling yourself that.

If places are ‘shitholes’ it’s because the tenants have no respect for the property.

Wait and see what happens when the market dries up and investors steadily increase the rents so only high earning professionals have the capacity to repay.

Students, families and those in lower paid jobs will be sleeping in cars.

I have 3 properties. I don’t welcome an increase in tax but it seems fair enough and I can’t seriously argue against it. We are in a fortunate position. It’s passive income, why should you get to pay less tax/NI than you would through a job?
I will have to review rents now anyway due to the renters rights changes, but I won’t be trying to screw over my tenants.

Yes, I hear you.
Still, there are some people here asking if I'm going to blow up my property or why I want to increase rent. 🙄

Corporate LLs do not mange better. They are faceless organisations who will use box standard low quality fixture and fixings and work on a cost recovery basis. They don’t care how much is paid on maintenance or the quality as they will just recharge it to the tenant the following year as part of the rent structure:

If we sell we have to pay capital gains tax.

We will probably sell as our current tenants move out. It's becoming less and less worth the amount of effort it takes to manage them. The new tax could have been worse though. We'll cope.

In common with many landlords, we charge the going rate when we advertise an empty house but then don't keep increasing the rent to keep up with the going rate. Good tenants are worth looking after and holding on to so we deliberately keep it cheaper than what they could find elsewhere.

Same with us. I don't feel the need to put the rent up every year. Tennants was there for almost two decades and we only put the rent up by 200 in all that time. Because it's cheaper to do that then keep on changing tennants. Even one month empty wipes Out a rent increase. My profit has been in the house price increase which was always the point. To be on the property ladder and not let inflation price us out. The reason you don't meet many landlords like us is because tennants don't move out. They are happy. I'd rather have happy long term tennants. Churn costs a lot in renting. It's not all 100% ulteristic.

Can I rent from one of you lot please 😭
Only years our rent hasn't gone up was Covid.
Im antisipating another 100quid hike this Jan!

I will increase rent by about 5% next year having frozen the rent this year.
No doubt my tenant won’t be happy but I have little choice.

I have also earned money and paid PAYE tax on it. I have invested it in cash ISAs, savings accounts and premium bonds as I am risk averse at the moment.

If my appetite to risk was different, I would have invested differently.

You have made an informed decision to make an investment which carries with it a level of risk. And some of that risk is now being realised. I struggle to see what else can be said.

I’d encourage you to sell up OP. There won’t be fewer properties overall, but there will be fewer people hoarding the property we have for profit and more owner occupiers. Good stuff.

It is a shame that smaller landlords are being forced out of the market due to taxes being so much higher for invididuals vs corporates. Corporates and overseas investors are not a good thing for tenants - they can force up rents due to owning so many properties.

Large investors (eg pension companies) want long term stability. That means keeping good, reliable tenants and looking favourably on long term contracts. Much like how the rental market works in much of Europe.

“accidental” landlords will hopefully sell up, as will those who see providing homes as a short term profit. In many cases this frees up properties for first time buyers - I was a beneficiary of this when I bought my (ex-rental) first home a few years ago. One less house to rent was one more house for a renter to buy.