Ian Duncan Smith is the latest Conservative to criticise his own government’s fiscal policies regarding buy to let.
Writing on the Conservative Home website, IDS says that there should be widespread concern over the fact that many landlords are reconsidering their investments as a result of changes such as the phasing out of mortgage interest tax relief and the stamp duty surcharge imposed on additional property purchases including buy to lets.
“We should all be concerned about this, because private landlords are a significant provider of the additional housing we need. We won’t be able to provide all the housing in the medium term through aggressive building programmes alone. We will need other sources of accommodation, as well” writes the former Conservative leader.
“Despite what has been said and written, [landlords are] not enormous property magnates, for the most part, but often people using the market to help provide retirement income in later life or assets to pass on to their children” he continues.
He then goes on to call for a series of incentives for private landlords, including VAT relief on conversions and additional capital allowances. He also urges a tax on empty homes in a bid to discourage ‘buy to leave’ foreign investors - IDS believes a similar measure in New York has led to a reduction in properties left vacant.
Then he issues a concluding rallying call in favour of the buy to let sector, saying: “We are now in danger of missing the point, for what is certain is that even if we do achieve our housebuilding target, there will still be a continuing growth in demand and a significant part of this will have to be available through private landlords. It is time to review Osborne’s tax changes on buy to let landlords.”
You can see his full article here.
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I couldn't agree with a politician more than in this case, he is spot on.
I have always rated Ian and he would make a great Primeminister.
Landlords(the good ones) should be valued more and given incentives to build up their business and provide homes.
All expenses should be allowed including mortgage interest 100%
Landlords doing up properties to rent should not pay VAT nor for that matter people improving their homes or extending.
On top of this a level playing field is necessary for landlords and tenants,there is too much putting the tenant first and causing great expense for landlords to evict when rent is not paid.
Lets hope things change for the good landlords.
The landlords from hell need putting out of business they damage the good ones too much.
When he says "It is time to review Osborne’s tax changes on buy to let landlords" does that mean he will personally champion and work hard to accomplish the scrapping and reversal of those damaging taxes, all of them, especially the 3% surcharge SDLT and phasing out of mortgage interest relief (which I see as really being a phasing IN of taxing you for legitimate business expenditure and investment costs)?
If 'yes he will' then then great. If not then its all just political posturing and hot air.
Perhaps I'm just a cynic but I don't for a moment think his comments about introducing yet another tax, this time on empty properties (and cunningly calling it a "buy to leave" tax - very emotive and liberal sounding to me) was just an after thought that popped into his head while writing this. I personally think it's what this is all really about - sneaking in yet more tax without actually doing anything about the excessive and unfair burden we already have to bear.
All his nice words - that we like to hear - are probably just political packaging to sweeten us and ensure that nobody (apart from people like me) notice what might really be going on.
Let him put OUR money where his mouth is before we trust or back him!
Incidentally - I've long been aware of the sneaky "long term empty" council tax surcharge. Not every agent, landlord or general property investor knows about it but everyone should. Long ago (after the poll tax fiasco) c/tax was introduced to pay for local services used by the people living in the property, and if nobody lived in the property there was nothing (ever) to pay. Then, to ensure people weren't taking advantage of that "loophole" councils started inspecting properties where the owners were claiming the exemption. Then they introduced the rule that it had to be unfurnished" as well as empty (which was awkward in some cases but fair enough). Then the exemption was limited to being available only for a maximum of 1 year, then 6 months, then a piffling 2 weeks, and now it isn't available at all.
At the same time they are quietly phasing IN a council tax on empty properties - it's already there - if your property has been empty for more than 2 years (by even a day) you must now pay 50% MORE c/tax than a normal couple would pay, while living there, for local services. You should be able to see where this is going..... soon it will be charged where the property has been empty for over 1 year (not 2), then 6 months, then perhaps 2 weeks or maybe right away as soon as the tenants move out we'll be slapped with a 50% c/tax surcharge when we shouldn't have to pay anything at all. .....then, after a while, for "social" reasons, the surcharge will jump to 100%..... all of this is very wrong and very unfair.... why should landlords have to subsidies the local council and pay for their often poor financial management and silly projects?
We MUST remember that as property owners we are sitting ducks or, to continue the farm-yard metaphor, seen by local and central governments as their live-stock to be milked, fleeced and - when they become desperate - eaten alive! It's time we did more than occasionally bleat or mew in protest at these indignities, perhaps it's time we learned to bite back, or maybe become some kind of skunks and leave the politicians who thought they could fleece, milk, or generally harvest us with such an awful and permanent sticking stain on their careers that it "encourages the others" to treat us with more care and respect?
....I dream on, knowing we're just sheep really.
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