Tory Budget Squeeze: Why Small Landlords Are Feeling the Pinch

the Tories are out to crush the small landlord the spring budget of 2024 is absolute proof of this because there are four things they've done there are four changes they've done in that budget which are absolutely crushing to the smaller landlord in this video I'll speculate as to why they're doing this what those four things that that they have done actually are and I'll give you a root map out of all of this which shows you how you canot just survive but Thrive that's all coming up if you're new to this channel make sure you subscribe smash that Bell icon we put out videos each and every week to keep you up to date with what's happening in the world of property so we have had the budget of spring 24 you'd think there'd be a whole bunch of measures in there to help the Tories win the election but all the pundits seem to agree the budget is completely flat and is not doing that but there are some things that they've done in fact there are four things that they've done in the budget which are quite clear and together amount to a Massive Attack on the small landlord what do I mean by the small landlord we're talking about people that own second properties in their own personal lame which they let out they're okay with corporate landlords so landlords who are doing it as a business and own their properties in limited companies and corporate structures but the wrath of Tory policy seems to be against the smaller landlord say the dentist or the doctor with a couple of boletes on the side as a bit of a pension those sort of people are absolutely clobbered now what are the four things that the Tories have done in this budget and what's your way out of these if you're affected well the first thing they've done is they've abolished the furnished holiday let regime now in 2015 George Osborne changed the game for bolet property investors if you owned bolet property in your own name which was subject to a mortgage from that time you could no longer claim mortgage interest as a business expense but there was an exception to that regime because if you had furnished holiday lettings in other words you had a residential property and it was available to let for 210 days in a given year then it was accounted as a trading business rather than a buy toet business and you were allowed to claim your mortgage interest as a business expense against your uh taxable income but that has now been abolished now let me just reiterate something if you own a holiday letting accommodation and you own it in a limited company then you can still claim the mortgage interest as a business expense but if you own that in your own name you can't so what they're saying is that if you own property and you let it out and you own it in your personal name then you cannot claim your mortgage interest as an expense period so they're forcing you either to put those properties into some kind of corporate structure which you actually can can do there are ways of incorporating particularly furnished holiday let accommodation because it's seen as a trading asset and a trading business there are ways of incorporating those into a limited company but that's uh something for another video you can do that or you can sell up and that's basically what the government is saying you know go big or go corporate or go home now this is a strange thing about the budget it seems to be a whole package of measures that taken together in unison are all designed to crush the smaller unincorporated bolet landlord so what they've also done with the furnished holiday let regime is that they've said that the new rules are not going to come into effect until 5th of April 2025 you've got till then to do one of two things either put those properties into a limited company so that you can claim the mortgage interest or sell up now the interesting thing is provided your furnished holiday let has been available for 2 years and it's been available to let for 210 days minimum in each of those two years then it qualifies for business asset disposable relief which means that you will only pay 10% capital gains tax on the disposal of that asset so you see what they've done you know they've abolished the furnished holiday regime um they've said the rules aren't coming in until 5th of April 2025 but because you can benefit from this business asset disposal relief you can either incorporate and still claim your mortgage interest or sell up and get out and uh just be taxed at 10% capital gain now I'm going to speculate later on as to why they're all doing all of this but there's more to come there are more changes in this budget which all are geared towards crushing the smaller unincorporated landlord if you're finding this video interesting of course smash the like button and uh subscribe for more we put out three videos each and every week they've also made changes is to uh capital gains tax now capital gains tax is 18% but if you have residential property in your own name it used to be 28% so 18% for everything else shares or whatever it is it's 18% but if you have um residential property in your own name the capital gains tax was 28% now as of this budget they've reduced that to 24% so again so further sweetener they're saying look either you get incorporated or just get out and as a little sweetener to sell those properties we're reducing the capital gains tax you'd pay from 28 to 24% and there's more the other thing they did in the budget again which is laser targeted against the smaller landlord is the abolishing of multiple dwellings relief now I've got a whole video on how you can kind of still benefit by um purchasing multiple properties on their single transaction that's all coming out later so make sure you subscribe so that you're notified when that comes out but let me just explain what multiple dwellings relief is it's basically when you buy a number of different uh properties under a single transaction so of course the minimum threshold for stamp duty to be payable is £250,000 so if I was to buy a flat for2 200 Grand then there wouldn't be any stamp Duty payable so if I was then to buy a flat for 200k today and then in 2 months time buy another one from someone else at 200k and then a few months time buy another one for 200k I can end up buying four flats and not pay a million pounds worth of property and not pay any stamp Duty because there's four separate transactions so what um what multiple dwellings relief was about is that if I'm to buy a block of four flats all in one go from the same vendor each flat may be worth 200k the total might be worth 800k but I'm not paying stamp Duty as though I'm buying one £800,000 property I'm paying stamp Duty as though I'm buying four individual 200k properties which in this example is zero so what they've done rather bizarrely is to completely abolish MDR alog together now I think that's completely unfair because it laser target targets the smaller landlord here's why because if you are buying six or more properties in one transaction there are several other reliefs and exemptions and loopholes you can call them uh you can benefit from but if you're buying a smaller parcel of properties in one transaction in other words under six then there's limited amount you can do now this all seems very very strange in an election year you would think they would be doing a whole bunch of changes in the budget which together create better prosperity for all and all the rest of it and gives them greater chance of winning the next next election but it seems that there are a whole bunch of measures which are all designed to do exactly the same thing which is create further pressure on individual ownership of rental property they don't seem to want that anymore the conservatives seem to be on the path of favoring corporate landlords only and there are all sorts of big players looking to enter in the market some of which have already entered into the market and these are big giants with thousands of rental units under their portfolio and of course it will be different rules that apply to these corporate landlords as opposed to the smaller landlord so why are they doing all of this well there going to be a lot of conservative ministers at the general election uh looking for future jobs and directorships perhaps they're setting themselves up for those sort of employment opportunities but the mood music is clear before the election the conservatives have gone all out to ensure that the smalltime landlord owning properties in their individual name uh doesn't exist so it's incorporate or sell up now of course A lot of these problems that I'm talking about affects people that have been in the bolet game for several years because they're the ones who have typically got properties in their own name people that have entered the bolet space in the last 5 years have pretty much universally bought their properties in a limited company structure so you guys are pretty much good to go it's just the oldtime bu letters have a little bit of thinking to do we're going to cover this in more detail in future videos so make sure you subscribe and smash that Bell icon so you're notified when we upload new videos The Baker Street property meet is the UK's largest and number one property investors networking event the property Market is going through Monumental change right now and at Baker Street property meet we aim to keep you up to date with the latest tips and tricks and Insider tactics to help you keep on top of your property investing game and succeed in these troubled Economic Times the beg Street property me is fundamentally about networking because it's not what you know it's who you know and at begar Street we aim to connect you with the people to make your property Journey a Monumental success there's no better place to be to further your property investment Journey than the bake Street property meet so make sure you're here you're connecting with 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Channel: Ranjan Bhattacharya - Succeed In Property

Views: 91,185

Keywords: ranjan bhattacharya, succeed in property, property investing, property investment

Id: gbCmQfxhi0s

Length: 10min 39sec (639 seconds)

Published: Wed Mar 13 2024