Government to offer tax breaks to landlords for longer leases - wont be much

Fol20

This would be a logistical nightmare to enforce and what would you need to do. Leases have very little bearing for tenants. They can sign a 5year contract and 2 months in they can just decide to leave. On top of it tenants are already locked in for a number years through the tenancy act anyway so what difference does having a long term lease make? It’s a spin as always to make it seem like the government are giving something good to tenants in the form of more security which they already have through the residential tenancy act along with giving landlords something as well. I’m very biased in this however what I would like to see is some of the following:

1. 14000 tax free rental profit similar to rent a room so it’s on a level playing field for the small guy.

2. The ability to expense lpt, flat rate expense of diesel per property.flat rate also for phone bill.

3. Make the taxation of usc and standard rates the same so that all of the capital and current expenses can be deducted before taxation

4. Equality and speed when dealing with disputes which can actually be enforceable.

I think if they had these. Most landlords would be happy.

The Student

Fol20 wrote: »

This would be a logistical nightmare to enforce and what would you need to do. Leases have very little bearing for tenants. They can sign a 5year contract and 2 months in they can just decide to leave. On top of it tenants are already locked in for a number years through the tenancy act anyway so what difference does having a long term lease make? It’s a spin as always to make it seem like the government are giving something good to tenants in the form of more security which they already have through the residential tenancy act along with giving landlords something as well. I’m very biased in this however what I would like to see is some of the following:

1. 14000 tax free rental profit similar to rent a room so it’s on a level playing field for the small guy.

2. The ability to expense lpt, flat rate expense of diesel per property.flat rate also for phone bill.

3. Make the taxation of usc and standard rates the same so that all of the capital and current expenses can be deducted before taxation

4. Equality and speed when dealing with disputes which can actually be enforceable.

I think if they had these. Most landlords would be happy.

I agree extending the rent a room scheme should be extended but I doubt the govt will do so. Remember income tax from private (non institutional) landlords is quite significant and the govt will not want to forgo that.

By offering tax breaks for 5 yr and 10 yr leases all the govt have done is kick the can down the road. IE a landlord wont see the tax credit until yr 5 or yr 10 after the lease terms have been met.

I personally would not hold my breath on anything meaningful from the govt for landlords in the budget.

Supply of rental property is going to continually decline unless the govt actually give something meaningful to the landlords (not just tax breaks but also a quicker and more cost effective eviction process).

ouxbbkqtswdfaw

the_syco wrote:

REITs will charge as much as they can, won't entertain sob stories, and evict you if you feck up even just once.

Can REITS evict a bad tenant, or do they have to go through the drawn out RTB process?

The_Conductor

7axthys24v35jl wrote: »

Can REITS evict a bad tenant, or do they have to go through the drawn out RTB process?

They are subject to the same process as any landlord- they are however also in a position to twist the law within an inch of its life- for example, they tend to own the entire development- and cables and water do unfortunately get cut from time to time- or utility workers refused access to the complex, or cars clamped, security codes changed etc etc

Its a lot easier to manage a block of tenants- than it is a house here, a flat there. This is also why REITs don't buy individual properties- managing them would be a logistical nightmare- and they'd have the self same issues that small scale landlords have- which they can mitigate when they own the entire development..............

the_syco

The Student wrote: »

By offering tax breaks for 5 yr and 10 yr leases all the govt have done is kick the can down the road. IE a landlord wont see the tax credit until yr 5 or yr 10 after the lease terms have been met.

The 10 year thing sounds like what they currently do with the 10 year HAP lease, of "allowing property owners to claim 100% relief on their mortgage interest, as an expense against rental income". Which in reality doesn't really work, as does the 10 year lease still allow eviction for all the usual reasons? Or is this now a 10 year lease trying to be pushed over the current 6 year lease, but with a carrot approach?

7axthys24v35jl wrote: »

Can REITS evict a bad tenant, or do they have to go through the drawn out RTB process?

RTB process. But whilst landlords may let them stay if the tenant has been a good tenant for the past 6 years, and this is the first issue, to REITs you're now a problem. And they'll issue the notice to pay up, and if that's not met, the eviction notice. And whereas the landlord may not have the money to hire out a sheriff after this, the REITs will.

Oh, and they can do maintenance in the apartments next to them, under or above them, or in the hall outside them. The moment that they're evicted, their fobs can cease to work, so they can't access the building. They can still access their apartment, just not the building.

The Student

the_syco wrote: »

The 10 year thing sounds like what they currently do with the 10 year HAP lease, of "allowing property owners to claim 100% relief on their mortgage interest, as an expense against rental income". Which in reality doesn't really work, as does the 10 year lease still allow eviction for all the usual reasons? Or is this now a 10 year lease trying to be pushed over the current 6 year lease, but with a carrot approach?

.

I don't know what they are planning be honest. I have my doubts it will be anything worthwhile. The easiest is to extend the rent a room scheme. I cant see any other way to offer any real incentives without either a lot of admin work or having safeguards built in. With the extension of the rent a room scheme there is no admin work for the govt to administer the scheme.

What if I as a landlord signed a five lease with a tenant to avail of the tax break and the tenant for whatever reason decided to leave during the agreement. I miss out on the tax break through no fault of my own because the tenant was not there for five yrs.

I am at a loss as to why the Govt don't actually talk to Landlords and ask them how to resolve the issue. Maybe the Govt are finally realizing they actually need us and should work with us rather than against us.

ted1

Do the government not know about part 4?

After 6 months the tenant effectively has a 6 year lease

Marcusm

Given that the real pressure on government relates to social housing and “emergency” housing, a media savvy government would introduce a significant benefit for a 10 year CoCo or HAP type lease. Two birds, one stone and limits the benefit given rental levels.

Graham

ted1 wrote: »

Do the government not know about part 4?

After 6 months the tenant effectively has a 6 year lease

Unless the landlord wants to sell
or substantially refurbish
or occupy it themseves
or pass it to a family member

I suspect any tax incentives will be accompanied by the loss of some or all of those rights on the part of the landlord.

Baby01032012

But the minister has stated that landlords would still maintain the right to sell so I’d imagine there would be limited break clause.

I guess there would be something between the very limited current tax break for letting to social welfare tenants where landlord gets relief on 100% mortgage interest but much less than the section 23 of the 1990s that saw house prices in very rural areas hyperinflated solely based on the break to write majority of the build cost off against all rental income. However this then meant you couldn’t right the subsequent loss off against other capital gains for CGT.

Fol20

The Student wrote: »

I don't know what they are planning be honest. I have my doubts it will be anything worthwhile. The easiest is to extend the rent a room scheme. I cant see any other way to offer any real incentives without either a lot of admin work or having safeguards built in. With the extension of the rent a room scheme there is no admin work for the govt to administer the scheme.

What if I as a landlord signed a five lease with a tenant to avail of the tax break and the tenant for whatever reason decided to leave during the agreement. I miss out on the tax break through no fault of my own because the tenant was not there for five yrs.

I am at a loss as to why the Govt don't actually talk to Landlords and ask them how to resolve the issue. Maybe the Govt are finally realizing they actually need us and should work with us rather than against us.

I’d like to think that but I highly doubt it. More than likely they need to spin it so it seems like they are doing something for both sides yet doing very little or making it worse for both at the same time. They should get some realistic people from both sides of the fence into one room and mediate what can be done from a realistic sense and at the same time help out both sides

LotharIngum

The two biggest problems as I see it are.

1 so many landlords stuck on below market rents and cant afford to maintain property on what they are getting.
2 Tenants can screw over a landlord like there is no tomorrow, with absolutely no sanction.


Those are the biggest reasons landlords are getting out. Along with many other reasons not so big.