From City AM, in amongst the usual Home-Owner-Ist drivel we would expect:
For the economy, [restricting relief for BTL mortgage interest] would be a disaster. Between 1986 and 2012, 57 per cent of all new dwellings created were private homes to rent, the majority of which were by individual landlords providing vital houses for those requiring accommodation, especially those needing to move for work or study. These homes were not “taken” from those who wished to buy.
Yes they very much were so taken.
The home builders land bankers have a certain profit maximising level of output (currently 150,000 or so new homes per year) and that is how many they will allow to be built. And they will sell those to whoever bids the highest price.
If BTL landlords were squeezed out of the equation somehow, then prices would probably fall, but as the land bankers are monopolists, it is quite possible that they would release more land in response. (Others observed that when oil prices fell, output increased in response, because petro-states have to get a certain amount of income from oil.)
The demand for these homes is from the people who will live in them, they are the ones paying for them, landlords merely step in as middlemen and gamble on creaming off a few per cent difference between rents received and interest paid.
So to suggest that landlords increase the supply of housing is nonsense, and they don't even increase demand. What he is saying is like saying "without the supermarkets, farmers would have nobody to sell their food to". If people didn't need to buy food to eat, then supermarkets wouldn't bother buying it either.
And, dear Mr Ward, if you think that BTL landlords should be treated like proper businesses for tax purposes, why aren't you calling for VAT on rents and Class 4 NIC on net profits? Just like proper businesses?
Friday, 24 July 2015
The disappearing homes conundrum.
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9 comments:
And Business Rates on their 'businesses'...?
L, nice one, that too.
It would be more sensible simply disallow interest as a business expense altogether and discourage management getting businesses up to their eyebrows in debt in the first place.
B, possibly. We could call the payments to bond holders and lenders "dividends" and tax them like dividends.
That sounds like a good halfway house.
The headline "Bashing buy-to-let landlords will push up rents"
Nearly everyone believes this.
In which case, why is it that increases in interest rates lowers house prices, which are after all no more than capitalised rents?
Anti-LVT argument:
"LVT is no magic bullet and the things it is supposed to do are based around lots of supposition rather than anything sensible. It is completely overhyped. Particularly when it is in its tax and regulation replacement 'pure' form.
It is a little reminiscent of the window tax - which led to lots of building with very small windows. LVT of course leads to lots of building on very little land, i.e. high rise madness. Most people don't want to live in tower blocks.
And of course the rich will stop it ever happening. They are not keen on wealth taxes."
R, all tried and tested.
1. Nobody said it would be a magic bullet, but quite provably it would make lots of things better. Perhaps a bit better, perhaps a lot better, but better. And are these fuckwits seriously claiming that "Value Added Tax is a magic bullet" or that "National Insurance is a magic bullet"? No. So do we accuse them of saying it? No.
2. Re "high rise madness", the equal and opposite KLN is that "LVT will lead to urban sprawl because people will want to build outwards where land is cheaper". This is down to planning laws not the tax system. I don't think it will make that much difference to be honest.
So basically, the Homeys claim that LVT will simultaneously lead to "urban sprawl"and "high rise madness". They also believe that it will lead to farmers selling off all their land for development but at the same time all developers going bankrupt.
3. Yes, it is the land owning lobby stopping it happening. Duh. That is not an argument against LVT, is it?
The Homeys also argue that LVT is somehow a regressive tax (without ever defining this or saying relative to what) despite the clear fact that having LVT would lead to less inequality i.e. it cannot possibly be regressive.
To summarise: LVT is a regressive tax which rich people oppose. The Homeys really are that confused.
http://www.ibtimes.com/celebrity-chef-jose-andres-fires-back-donald-trump-about-10-million-lawsuit-2034947
Homeys on top form. Lawsuit over "lost rent."
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