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Thursday, September 22, 2011

Plans to tax empty landlords

I knew it was too good to be true. Since the last lot of politicians were booted out landlords have managed to side step any extra legislation or taxation. The worst we've had so far is a barrage of FACTSHEETS from the Housing Minister Grant Shapps.

Dark clouds are now appearing on the horizon as the new lot of politicians route around for some good ideas to justify their existence.

The new one involves taxing landlords who leave their property empty. Now this causes me a little bit of a dilemma as it strikes at two of my own core long held beliefs. Firstly, that my property is my property and I should be able to do what the hell I want with it..a kind of libertarian doctrine. However, I also hate to see waste. I despair at the frivolous manner that modern society applies to scarce resources. So how do you square this?

An indecent proposal?

The Community Minister Andrew Stunell has outlined proposals to allow Councils to charge higher council tax rates to landlords owning property that has been empty for 2 years or more. On balance I think that I would have to give grudging support to this. Any landlord that fails to use such a precious resource as a property should be nudged into action.

However, I have one caveat to this grudging support is that it's not just private landlords that are targeted. What about the public sector who are responsible for many of the vacant 700,000 properties frequently quoted by politicians. I just ask for equal treatment for landlords in the private sector and the public sector. That's not too taxing a request surely?

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Kris said...

I wonder how they will treat second-home owners who are desperately trying to sell their property, in a housing-market that is currently very weak? It is not unusual for some houses to be on estate-agents' books for up to two years or more.

Paul Barrett said...

Well they won't be empty will they?
Any person having difficulty selling will rent out on a 6 months AST
When they get a buyer they give notice and by the time all the conveyancing process has occurred the tenant will have moved on.
Get yourself RGI at £9 per month for £50000.00 per claim.
Job done.

Jigsaw said...

Think you are missing the point Paul - your suggestion is ok if that's what YOU want to do, but it should not be forced on people by taxing them. It is significantly harder to sell a place if it is tenanted and as you have already pointed out in other posts, tenants may have other plans about your moving out date which could spoil your plans to exchange contracts or complete on certain dates.

The author's point about taxing public sector landlords in the same way is of course never going to happen but would at least be 'fair'. Government is completely clueless about housing. The more they interfere, the worse it gets.

Paul Barrett said...

Perhaps I didn't mention but yes I agree that these people should not be taxed.
All I was saying that you would rent the place you are trying to sell if you had to rent somewhere else if you couldn't sell it unless you could afford to pay rent and mortgage.
Not many people can do this and therefore they will have to rent out the place they are trying to sell if it is taking time.
Yes it would be awkward but if you are not in the fortunate position of being able to sell then don't sell; rent to where you need to be and avoid crystalising the capital loss.

Not an ideal solution I know but you do not need to sell if you need to move somewhere.
The present economic climate will not change for about the next 10 years; just like the 90's