The joy of being a landlord
- Thread starter Quartz
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Of course we did but we didn't really build many of them with the future in mind and things have changed an unbelievable amount since WW2.
Man of Honour
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This. We ultimately sold ours and of course it was bought by a big company, I doubt they’ll be as friendly as we were. Bought a holiday home instead, much more relaxing. The war against smaller landlords won’t end well for renters.
I think that it was the thirties that we built new towns as we cleared slums in London but your point stands. The fact that houses were cheaper to build, no central heating, one bathroom and a simple kitchen was also pertinent as was cheap labour due to very high unemployment. Again in the fifties Britain had to rebuild after the bombing of cities. I am not that old but can still remember quite large areas of rubble in the sixties.
These sites no longer exist as most towns and cities are quite densely developed and new housing is on the peripherywithout much in the way of shops and hospitals etc.
Associate
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Dear mods, this is relevant to the thread and not needlessly dragging politics into it, thanks.
If this happens, I can’t possibly imagine who the extra cost will be passed on to.
I’d like to think she’d not be that daft, but who knows..
Landlords could face national insurance on rental income in budget
The Treasury is considering a plan to apply contributions on the ‘unearned income’ as Rachel Reeves addresses a £40bn hole in public financeswww.thetimes.com
If it's national insurance does that mean companies who own 1000s of houses won't have to pay? And small scale landlords will have to pay?
Yes, given companies can’t pay national insurance. There are probably other trade offs, though, so I doubt it’s as simple as big corporate landlord bad, small individual landlord suffering for their art.
Soldato
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that sounds about par for the course and is exactly why i was bleating earlier. the people with the real money always seem to get treated better than the normal working people
Soldato
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100% - Anyone who deals as sole trader is clearly getting pushed out now. Companies with large portfolios purchase as a LTD cvompany are exempt form Income tax and N.I although they pay corporation tax.
To be fair this pushing out of private individuals staretd with Osbourne appeasing the masses by cancelling out mortgage interest being deducted from tax. Let me explain ;
Landords don't currently pay income tax o n their " income " . They pay income tax on their income after adding back in most of their mortgage interest. That measn they pay a higher rate ! They get a 20% credit .
Extreme example - landlord has £1200 income in rent but his mortgage is £1000. Net they recieve £200 . In any sane world they would be taxed 40% ( most will be higher reate tax payers ) on £200=£80 tax but thanks to Mr Osbourne they dont get to deduct the mortgage interest ,. they get a 20% credit on said mortgage interest. Their tax is 40% of £1200 minus 20% of £1000 - THEIR TAX IS £280
Just let that sink in - Their net income is £200 but they are paying £280 in tax - Like WTF ?
Ok im giving an extreme example but you see wheere im comig from. Add NI into the equation you can see why masses of lanlords are selling up and this is not good for tennats. Mark these words , if Rachel from accounts adds in NI your rent will go stratospheric.
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Not quite. As a company director my company pays corporation tax but if I want to remove money from the company it is then subject to income tax. Now NI is a bit trickier but I can reduce overall tax burden by paying NI for myself and the other directors. If I dont pay NI I actually end up paying more income tax so NI is a bit of a red herring.
In short they get you one way or the other as a ltd company.
Can't you just register a company in the Cayman Islands or something? Don't get me wrong, I'll be the first to nail someone to the wall for tax evasion but this gov's greed, and quite frankly, ****** up priorities are getting beyond a joke.
Not if your place of central management and control is the UK - then your company will be deemed UK resident. There’s also laws to catch non-resident landlords in the UK tax net.
Associate
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I'm actually in the process of purchasing a house in cash as an investment after my divorce while caring for and living with my parents. So I plan on putting it on rent. Does it probably make more sense to form a limited company and purchase it under a company name, if I'm renting it out in the interim?
Wouldn't it be less of a tax burden to just take a dividend?
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Soldato
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Yes , I believe your stamp duty liability is the same either way.
Edit, sorry re- read your post best check witha tax account on that matter as you might not be liable for the 5% stamp duty surcharge if its your only property , Most of us buy rentals as a a 2nd property .
And yes his dividend would far outweigh the N.I .
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Something I didn't know until having a quick look at this is how well it's already geared for people and businesses with big buying power.
Turns out the stamp duty you pay on a second residential property is reduced if you buy 6+ at once as it's then considered a commercial transaction so the stamp duty is reduced.
Jeremy Hunt, perfectly legitimately, made use of this when buying 7 flats at the same time.
Huh. I guess the more money you have the more you save.
Sorry, but of a tangent but I found it, well, interesting...
Turns out the stamp duty you pay on a second residential property is reduced if you buy 6+ at once as it's then considered a commercial transaction so the stamp duty is reduced.
Jeremy Hunt, perfectly legitimately, made use of this when buying 7 flats at the same time.
Huh. I guess the more money you have the more you save.
Sorry, but of a tangent but I found it, well, interesting...
There’s a tax free dividend yes and of course we take that but it won’t light up your life, about £4-5k a director when I opened the company probably a chunk more now but either way it’s all accounted for in the overall picture. If you do things properly (as we do) then your accountant will factor everything in but you don’t get away with it! Tax has to be paid and whether you call it income tax, corporation tax or NI it all works out about the same!
Companies want to move into this area and they have lobbied very hard. They want to push out the small private landlords, bigger landlords also want to push out smaller landlords. Ultimatly they do not want people to own property, they want you to rent. Declining Homeownership now a real problem. The system is bent towards the large landowner and companies.
The legal system favours companies and the very rich.
They got rid of RTB (RTB was one of the best policies that allowed the explosion of homeownership in this country, the initial policy model was a win win for both, yet the council and future gov destroyed it).
They got rid of RTB and again got the population behind it, yet they failed to highlight the majority loss of council homes were not RTB but councils giving large portions of their portfolio to housing associations for FREE. The idea: HAs would manage the properties and keep them in a good state. Which we have seen this not true and now they are asking for government funding to bring them up to a good state.
Housing associations are owned by equity companies. Don't get me started with shared ownership scam, lol. People are truly dumb if they entered the property system this way.
If I had a choice, renting a property or shared ownership I would go for rental. These poor shareholder buyers have lost a large portion of there original deposit.
This business model is common wherever assets that once belonged to the public have been privatised. Time and again, the policy has proven to be a failure, with taxpayers continuing to bear the cost.
Look at the massive leasehold problem in this country . large freeholders are using the human rights law to protect their business model and fleece the public privately or publicly.
Big land owners say leasehold reform 'incompatible with their human rights'
News - Nigel Lewis - Leaseholders have failed in their attempt to stop freeholders from challenging the Leasehold and Freehold Reform Act.
www.landlordzone.co.uk
The government 10 years ago destroyed the legal system in this country for the average person.
The more I see this in the business world the more I want to get out of this country.
Everything that made the UK system fair and balanced is being taken apart, destroyed.
Your tax money, central and local government wealth is being transferred to companies and the very rich. It is being legally stolen from the public.
Corporate welfare is the biggest drain of taxpayers money in this country. These landlords are making millions from asylum housing, the system is bent towards these landlords and away from home ownership. The asylum problem can be stopped in 24 hours by the government if they really want to stop it.
500k property tax is another attack on the private homeowner. They will never introduce council base of proportion of value. Why should a 10 million pound property pay the same council tax as a 500k property. The temporal yield favours the rich over the average person.
Local and government are selling their income deriving assets.
This is why I am getting out before they start to take large chunks of my wealth, it is a disaster and very sad what's going on in this country.
You may choose to continue arguing with people like me, but those who defend this are either conditioned or driven by patriotism.
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Rent goes up, state gets more money.
Lol give it a bit of time and you'll pay NI on your pensions and savings.
CGT on your main home is coming be prepared for that.lol.
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Soldato
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Being able to own your own council house might have sounded good at the time, but really it just exposed a greater proportion of the UK population to the rapacious and entirely self-serving interests of the private banking sector.
Council housing is a good and necessary thing and there should be more of it if you are not going to regulate and control the private banking sector in a meaningful and effective way.
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You are exposed to the banking sector in everyway. Renting you lose 100% of your money, no security high chance of homelessness. Owning cheaper long run.
Leases gets return back to the council after 120 years. if. Renewed council gets another lump sum from the owner, plus none of the maintenance costs . The transfer of property from council to HA, no money to council and government has to fund repair costs which are inflated.
Councils have not lost from RTB, as property eventually returns back to the council. Under HAs, loss of income and council gov would need to give grants to fun repairs, does not return back to council and no payments are ever made. Oh HAs are now suggesting that more council properties should be transfer onto their books.
Councils lose rental income from RTB, but they don’t carry the repair costs anymore and they can still earn later through lease extensions, ground rent and control future works which then reduce total maintenance costs they gain from service charges without using its own budget. Incentive of owner to work to pay the mortgage, stamp duty and council tax etc.... Everyone wins.
They get zero from HAs, and taxpayers have to fund repairs. Equity companies win, no one else. No incentive to work, higher unemployment, less spending in the economy, council have to fund council tax..
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