My Letter to my MP, James Brokenshire, Old Bexley and Sidcup
Thanks James for your prompt reply.
Letter to my MP, James Brokenshire, Old Bexley and Sidcup
I think you have missed my main point, which is this.
Never mind the first time buyer issue, there is now an unfair playing field between big and small landlords that has been created by the Conservative government.
Big institutional investors – pension funds, big overseas property companies and the like – are exempted from the effect of both sets of taxes. Only the “Mum and Dad” buy to let landlords must bear SDLT hikes and the removal of the ability to deduct interest at their at higher rate of tax. This means that many will pay tax even though they may have significant net losses on their rental business – a fairly remarkable and unique thing!
It seems to me that this change is not about first time buyers. It is really all about the big pension funds being terrified that following earlier changes, people coming up to take their pensions would take advantage of the new rules and spend pension cash on buy to let investments, instead of buying an annuity from the pensions funds companies.
Being fearful of the loss of fee income, the pension funds have nimbly persuaded your government to clobber small buy to let investors. This is a double win for them…
- The Mum and Dad landlords are now scared off buy to let, so will take out an annuity instead.
- The way is also open for the pension funds to invest in property to rent themselves
It looks to me that, the Conservatives have shown that, once again, they are really the party who looks out for big businesses and the City and not the small player.
Unless this is overhauled, your party has no chance of securing my vote, irrespective of what Labour propose for the private rented sector.
See my other blog post on this:
Looking forward to your reply. Yours sincerely, David Lawrenson
Notes (not in my letter): Now we know where all the extra cash in the budget came from. (The Office of Budget Responsibility revised their figures for tax receipts up as a result of massively revising up forecasts for net inward migration. Migration is, of course, another area of failed promises from this government – a matter that my MP, being the immigration minister, will no doubt be fully aware).
Of course, Osborne, like many other governments would like more of us to be homeowners and pension holders because there will no cash left to pay for folks in their old age. Many of us will have to sell our houses to pay for our care in care homes (the day rate for which for some reason appears to be about six times the cost of a night in an IBIS or Travelodge), though at least the Care Homes will be partly staffed by new migrants, bless ’em).
Private Eye’s comments on George Osborne’s family business and its tax arrangements also makes for interesting reading).
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