I'd suggest that you can also expect a cut on pension tax relief - it probably won't be eliminated entirely, but it will probably be cut back to standard rate (20%).If the government can change the rules on the amount of tax relief available on an investment property (which it has, and will probably do again) why can't they come along and say - all the tax relief you thought you were getting to fund your pension is wiped off the board. Tough luck and you can trust nothing in this country. It's a very bad precendent.
This simplistic analysis omits the important interrelationship between the rental market and the owner-occupier market. For every landlord that gets out of the business, that is one more property up for sale. It will either be purchased by another landlord (keeping the supply-side of the equation) or by an owner-occupier (reducing the demand-side of the equation).That's not surprising - removing incentives/imposing taxes on landlords has the effect of reducing the supply of rental properties, which leads to increasing rents
For every landlord that gets out of the business, that is one more property up for sale. It will either be purchased by another landlord (keeping the supply-side of the equation) or by an owner-occupier (reducing the demand-side of the equation).
People such as Merc above, who take such delight in seeing landlords screwed in this way, seem happy to ignore the fact that
If they are recent entrants to the market, they have no profit or maybe marginal profit thanks to our most-generous mortgage interest tax reliefs.People such as Merc above, who take such delight in seeing landlords screwed in this way, seem happy to ignore the fact that
b.that they pay income tax on their rental income profits.
Did bank staff get a bonus for every mortgage on an investment property approved?Instead, the Bonuses were paid for crazy lending and allthough the loans have gone pear shaped, none of the bonuses have been recalled.
Expect the tax relief on mortgage interest to be reduced or eliminated. Maybe if they had listened to Bacon in the early part of the decade, the prices wouldn't have got so crazy.
Dont see the relevance. Owning property is not a business its an asset, an investment.
can other businesses write off interest on business loans as an expense for tax purposes ?
Yes, of course they can. This is a fundamental tenet of our tax system.
Why did they bring in Bacon and more importantly why did they abolish it. Oh yes that's right, it made property prices collapse and rents go up and less rental property available to tenant's restricting their choice and empowering landlords.
Because housing is a fundamental human need - because investors can/do make sure that they maximise their interest (and get the state to subsidise their mortgage on an ongoing basis) by never repaying capital, and keeping their own capital on deposit. It's just a financial engineering scam.Ok - I actually didn't know the answer to that.
Well - with that in mind, can someone explain to me why the same benefit should not apply for property investors?
Because housing is a fundamental human need - because investors can/do make sure that they maximise their interest (and get the state to subsidise their mortgage on an ongoing basis) by never repaying capital, and keeping their own capital on deposit. It's just a financial engineering scam.
If the investor can't manage to repay the debt over a reasonable period (say 20 years), they really shouldn't be in the landlord business. Interest-only loans are gambling and speculating - and have led us into the bubble.The reality is most property investors don't have lump sums of cash lying in bank accounts for fun.
Please don't tell me that, after all that's happened, you are prepared to put your trust into bank lending controls to keep down property inflation?And banks are being far stricter these days insisting investors make capital repayments.
It's a fairly simple principle - if you have the income, you pay the tax. PAYE payers don't get to whinge about all the PAYE they paid last year, or all the VAT they pay this year. The other taxes paid are irrelevant. If you have the income, you pay the tax.And even if that was the case - which it isn't- then pro pert investors have given more than their fair share in taxes. As I said in my previous post, I paid over €130k in taxes for 2 properties totalling 750k.
I really don't think the state can complain about their overall net gain in taxes due to property regardless of whether the very odd person is taking advantage of the tax relief.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?