I trust that by now most small buy-to-let landlords will have woken up to the fact that Osborne and the so-called Conservative Party are out to get them.
Before the last election we all feared that Ed and his Band of Brothers would get in and introduce more anti-landlord legislation. We all hoped that shiny face Cameron & Co would ride to our rescue. But as the old saying goes, be careful what you wish for!
The Tories’ Anti-Landlord Legislation – Where we are now
These are the main anti-landlord changes that have been introduced by this ‘Conservative’ Government since they won the last general election, admittedly courtesy of the undemocratic first-past-the-post system…
- A gradual reduction in the allowable financial costs of purchasing and owning, particularly mortgages, a buy-to-let property. By 2020 relief will only be available at the 20% rate, no matter what your total taxable income.
- And in Osborne’s Autumn Statement from April 2016, he outrageously increased the Stamp Duty Land Tax (SDLT) by 3% specifically on buy-to-let properties and additional home purchases. So for example, the marginal SDLT on a property costing £400,000 will increase from 5% currently to 8% – on buy-to-let and additional property purchases only. The marginal rate above £250,000 for non buy to let purchasers will still amount to £7500, but for the Evil Buy To Let Investor it will be £12,000.
- Landlords will have to pay any CGT due on selling an investment property within 30 days, as opposed to the current arrangement where it is in the January following the tax year of disposal.
- And the tell-tale bit… Commercial Investors with more than 15 properties are expected to be exempt from Osborne’s changes.
- Finally, although not directly instigated by central government, many local authorities (Labour and Conservative) have introduced compulsory registration schemes for private landlords. They pretend these schemes are designed to root out rogue landlords but in reality they are of course just more money making schemes because they charge landlords for registration.
‘I want to help more young couples buy their own home’
So kindly uncles George and Dave are really concerned about struggling first-time buyers are they? These are the same people who introduced draconian reductions in benefits for people on Disability Living Allowance, introduced a poorly conceived so-called ‘bedroom tax’ and wanted to strip away tax credits from people on very low incomes before any increase in the minimum wage kicked in. True, Osborne backed away from this in the Autumn Statement, but only because of huge opposition from both inside and outside the Conservative Party.
The fact is that PR politicians like Cameron love to use phrases like ‘more help for working families’, ‘getting more bobbies on the beat’ and ‘helping struggling first-time buyers’.
So what is REALLY going on?
It is my firm belief that the Conservatives are just trying to help their friends in The City and dressing it up as wanting to help first-time buyers, by hitting the Evil Buy To Let Investor, who has for years now become completely demonised.
The Tories and others claim glibly that buy to let investors are now the main cause of the unacceptable rise in the cost of owning your own home. No they are not. The causes are complex and based mainly on supply and demand. Not enough homes are being built to satisfy an out of control demand for all kinds of housing, caused mainly by uncontrolled immigration. But at the same time if we just build more homes without the related infrastructure then the country will literally grind to a halt and become a hideous place in which to live. Finally, the reason so many older people have been resorting to buying to let, is the ludicrously low rate of interest they can get by leaving their savings snoozing in the bank or trapped in a poor performing pension fund.
You see, for years now the big City institutions have been jealously looking at the level of returns private investors have been getting in the buy-to-let market. This has naturally choked off money that would otherwise have gone into their pension schemes and rip-off investment funds – where they earn high management fees.
On a personal note, I am not opposed to making life more expensive for people who wish to indulge themselves in second homes. But I am totally opposed to this continued demonisation and financial attacks on people who have bought property to let out as their business. Just increase interest rates and you’ll soon see people backing away from buy to let with all the stresses it can entail.
In short, The City wants a piece of the Buy-To-Let Pie, and Osborne plans to give it to them.
Sign The Petition
A petition has been set up to oppose the planned reduction in tax relief for buy-to-let landlords. I did not create this petition but I have signed it. This link takes you to it.