Tuesday, May 29, 2007

Buy to let tax ha ha

It would take a heart of stone not to laugh at the news that up to 80,000 buy to let investors face a massive tax bill from the Inland Revenue, which might mean they have to sell some of their properties.

The Times' leader describes buy to let as a 'useful social investment', good for both landlords and tenants and therefore society as a whole. This is undeniably a widely held view amongst landlords, but it rests on the idea that it is good for society that there is a growing number of people who own several houses, and a growing number who own none. I struggle to see why it is better for people who can't afford to buy to contribute towards their landlord's mortgage, rather than being able to rent (at lower cost) from a council or housing association. Buying up several properties purely as an investment opportunity is a kind of anti-social behaviour, like its more obnoxious cousin 'buy to leave'.

One modest suggestion. How's about taking this opportunity to increase the amount of social housing by using the tax money to buy up any properties that buy to let investors have to sell?


At 10:14 pm , Anonymous Anonymous said...

So if I get a new job 200 miles away, can I call the local council and have it send me a list of the three bedroom houses that I could rent from it?

No, I didn't think so. Therefore I need a sensible private rental market, so I am able to find somewhere to live and take the job I've been offered.

The problem with the housing market is not the presence of buy-to-let investors or landlords - it's the lack of supply of housing driving the price up.

Allow more houses that people want to live in to be built, and the price will come down.

Introduce a land value tax (on the unimproved value of the land) in place of (at least some of) council tax and you disincentivise land banking.


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