Always Learning
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Yes Brendan there is. The tax treatment of rental income as "passive" or "unearned" income, for example its exclusion from eligibility for pension contribution tax relief, is highly damaging, and an illogical relic of the 1970s socialism that sought to punish investors.Is there something wrong with the tax treatment of landlords?
Red herring. It would be madness to tweak the tax system to encourage individuals to borrow to invest in shares.They get full tax relief on interest paid - unlike investors in shares who get no such tax relief.
The laws of economics suggest otherwise. Every incentive and disincentive to supply respectively affects supply.There are some minor issues about treating LPT as a deduction and pre-letting expenses. But fixing these would not affect the decision to invest in or divest from residential property.
That's needed too.So it's not fixing the tax treatment. It would be providing some tax incentives to keep people in the market.
There's no reason why the tax system shouldn't be included in any such rebalancing. After all, it's the same ideology and prejudice that has given rise to both the crazy regulations and the punitive tax rules.But it would be far better to fix the crazy regulation of the sector and rebalance the rules to make the treatment of landlords and tenants fairer.
The tax treatment of rental income as "passive" or "unearned" income, for example its exclusion from eligibility for pension contribution tax relief, is highly damaging,
But it would be far better to fix the crazy regulation of the sector and rebalance the rules to make the treatment of landlords and tenants fairer.
It is highly damaging Brendan. My landlord clients have tended almost uniformly tended to recoil in horror when it's explained to them that it's impossible to shelter rental income against what for most of them is 50%+ tax. It's a perverse state of affairs when we don't have enough investment in residential property.It's hardly "highly damaging".
Most people do not use up the full contribution limits on their earned income, so I doubt it would make that much difference.
Again, if the Minister announced in the morning that he was going to allow landlords to add their rental income to their reckonable income for pension purposes, I doubt if it would affect the decisions of many landlords.
Brendan
We have a housing crisis which is getting worse by the day. We were able to introduce the PIP during the pandemic, we have special treatment for farmers in respect of various forms of farm relief. There appears to be an ideological resentment to landlords and to be seeing to do anything to benefit landlords. People fail to realise its those looking for a rental property who are suffering the most.Is there something wrong with the tax treatment of landlords?
They get full tax relief on interest paid - unlike investors in shares who get no such tax relief.
There are some minor issues about treating LPT as a deduction and pre-letting expenses. But fixing these would not affect the decision to invest in or divest from residential property.
So it's not fixing the tax treatment. It would be providing some tax incentives to keep people in the market.
But it would be far better to fix the crazy regulation of the sector and rebalance the rules to make the treatment of landlords and tenants fairer.
Brendan
What has changed since the budget why didn't they implement this then?
He says himself it's a trend that has been ongoing for 6 years.
Is there something wrong with the tax treatment of landlords?
This is true.Is there something wrong with the tax treatment of landlords?
They get full tax relief on interest paid - unlike investors in shares who get no such tax relief.
It's not about treating investors or landlords fairly. It's about keeping properties owned by individual landlords in the rental market. An existing vacant house can be put up for rent much faster than a house that has yet to be built.I can't see any reason for treating them differently. But maybe I am missing something
If (long term) rental income was not taxed at all there would be a lot more accommodation up for rent.
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