Why do they still subsidise Buy To Let?

[GB9]

Ok, we are short of money. Yet the main group of people who made money from the boom i.e. property owners between 2000 and 2008, haven't been made to pay.

BTL in particular is given a massive backhander in being able to offset mortgage interest against income. The theory behind this is that it is a business.

Firstly, how can you describe buying one or two BTLs with someone else's money and renting it out as a business? Compare that to many of us who have to find work, turn up at a client's site and do a full day's work, and then may have a period of no income whilst finding the next work. One seems more like a business than the other, except Hector disagrees. For most, BTL is nothing more than an investment. How many times have you heard the term 'investment property' rather than 'business property'.

Which brings me to point number two. If you regard BTL as an investment, which for most I do, then how do you justify off-setting the interest against income before tax? You would struggle to get that for any other personal investment.

And finally, the people who made most from the boom were those who owned property during the boom. Time to tax them on any profit when the property is sold. And no, the profit hasn't already been taxed. The initial payment may have been but not the profit.

[MarillionFan]

You pay tax on the rental profit and pay capital gains when you sell if you've made a profit.

You pay tax on share dividends and capital gains if you sell at a profit

You pay tax on profits on a business and corporation tax when you take out

You pay capital gains on other investments

So WTF are you wittering about?

[Moscow Mule]

He's wittering about tax relief on second home mortgage interest.

If that was abolished, there'd be a lot more homes knocking about for people to buy.

The second point about tax on profit on sales seems to show a lack of understanding about CGT.

[eek]

He's wittering about tax relief on second home mortgage interest.

If that was abolished, there'd be a lot more homes knocking about for people to buy.

The second point about tax on profit on sales seems to show a lack of understanding about CGT.

Its not second home mortgage interest its tax relief on business expenses. Granted its a mortgage attached to a property but its no different an expense to a mileage claim.

[BlasterBates]

A mortgage is a loan. Letting a house is a business. When you run a business and take out a loan the loan interest is an expense which you offset against your income. It is not a subsidy. The profit of business is the surplus you make after all business expenses have been subtracted. Interest payments are an expense. Any gains you make on the house due to capital appreciation are also taxed.

Every penny you make from a BTL is taxed. There are no tax breaks.

[bobspud]

Ok, we are short of money. Yet the main group of people who made money from the boom i.e. property owners between 2000 and 2008, haven't been made to pay.

BTL in particular is given a massive backhander in being able to offset mortgage interest against income. The theory behind this is that it is a business.

Firstly, how can you describe buying one or two BTLs with someone else's money and renting it out as a business? Compare that to many of us who have to find work, turn up at a client's site and do a full day's work, and then may have a period of no income whilst finding the next work. One seems more like a business than the other, except Hector disagrees. For most, BTL is nothing more than an investment. How many times have you heard the term 'investment property' rather than 'business property'.

Which brings me to point number two. If you regard BTL as an investment, which for most I do, then how do you justify off-setting the interest against income before tax? You would struggle to get that for any other personal investment.

And finally, the people who made most from the boom were those who owned property during the boom. Time to tax them on any profit when the property is sold. And no, the profit hasn't already been taxed. The initial payment may have been but not the profit.

Sorry I am missing your point...
Are you suggesting that every one that is stuck in rental accommodation really wanted to buy a house instead, but now can't just because of a market distortion?
Do you think for one minute that Cornwall would become a bustling centre of commerce if all those nasty posh people had to dump their little weekender retreats?

Cornwall is a ghost town for a very good reason. ITs as horrible to get to as Scotland or Wales! (and thats coming from someone who lives on its doorstep!)
I have family that live down on the cost and they continually moan about the incomers until you point out that most of them knew the person that sold the damn house to the outsider in the first place. Further more the person that sold-out had already wandered off to the smoke to make real money because it has and always will be a pain in the arse to make substantive cash in a rural area. In a lot of cases the only thing keeping much of the little seaside towns looking good is the massive business in renting the place out to outsiders for the 4 months of the year that it is vaguely nice to be there.

[sasguru]

Ok, we are short of money. Yet the main group of people who made money from the boom i.e. property owners between 2000 and 2008, haven't been made to pay.

BTL in particular is given a massive backhander in being able to offset mortgage interest against income. The theory behind this is that it is a business.

Firstly, how can you describe buying one or two BTLs with someone else's money and renting it out as a business? Compare that to many of us who have to find work, turn up at a client's site and do a full day's work, and then may have a period of no income whilst finding the next work. One seems more like a business than the other, except Hector disagrees. For most, BTL is nothing more than an investment. How many times have you heard the term 'investment property' rather than 'business property'.

Which brings me to point number two. If you regard BTL as an investment, which for most I do, then how do you justify off-setting the interest against income before tax? You would struggle to get that for any other personal investment.

And finally, the people who made most from the boom were those who owned property during the boom. Time to tax them on any profit when the property is sold. And no, the profit hasn't already been taxed. The initial payment may have been but not the profit.

FFS If you're going to have a moan at least understand what you're moaning about.
I'm one of those who made money from property in th 90s and 00s.
Paid hundreds of thousands in CGT.

[d000hg]

Firstly, how can you describe buying one or two BTLs with someone else's money and renting it out as a business?

Because many businesses use credit and in fact rely on it to survive?

Buying a property and letting it out is more a 'true' business than being a contractor...

[GB9]

BTL a business? My arse.

Well I've flushed out the BTLers.

BTL for most people isn't a business, its an investment. In fact I know a couple of people who during the boom were in no rush to get tenants as they were awkward and made a mess of a newly refurbished pad.

And because in the vast majority of cases BTL isn't a real business, but an investment, you shouldn't be allowed to offset costs, including interest, against income. You can't do it with any other investment I can readily think of (well, a couple specialist ones).

As fort CGT, I was talking about having it on primary residences as well as BTL. I've lost track of the number of people I know who are sitting on healthy property 'profit' for having done nothing, yet at the same time blame others (mainly bankers) for all today's problems.

My overall point is, how can the government / HMRC claim contractors (the vast majority) aren't real businesses when someone who borrows some money to buy a property and rent it out, is. That's the joke.

[rd409]

Well I've flushed out the BTLers.

BTL for most people isn't a business, its an investment. In fact I know a couple of people who during the boom were in no rush to get tenants as they were awkward and made a mess of a newly refurbished pad.

And because in the vast majority of cases BTL isn't a real business, but an investment, you shouldn't be allowed to offset costs, including interest, against income. You can't do it with any other investment I can readily think of (well, a couple specialist ones).

As fort CGT, I was talking about having it on primary residences as well as BTL. I've lost track of the number of people I know who are sitting on healthy property 'profit' for having done nothing, yet at the same time blame others (mainly bankers) for all today's problems.

My overall point is, how can the government / HMRC claim contractors (the vast majority) aren't real businesses when someone who borrows some money to buy a property and rent it out, is. That's the joke.

Generally an IT contractor has got nothing to lose. If the project goes bust, all s/he has to do is find another one.

Whereas, the price of property may well go up or down; the rents may follow the same path, but the amount owed by the business never follows the market trend. The amount of outstanding debts can make your other properties at risk as well, unlike standard IT contracts.

HTH.