It could be easily calibrated to make it less of a burden on average. It also makes the tax treatment neutral with respect to the source of finance used - the tax system shouldn't encourage debt over equity.That would mean an effective tax increase on many recipients of rental income
Not if it's a flat rate.It could be easily calibrated to make it less of a burden on average.
It makes no sense, when there's a shortage of investment, to discourage new and predominantly leveraged investment.It also makes the tax treatment neutral with respect to the source of finance used - the tax system shouldn't encourage debt over equity.
Nonsense on both counts. (The 12.5% flat Corporation Tax has been an absolute bonanza for employment of accountants and accounts staff generally.)Finally it has the huge advantage of simplicity which means less work for accountants
"on average" - most tax changes have winners and losersNot if it's a flat rate.
A tax rate of 25% on all cash received from your tenant is remarkably simple to calculate compared to the current system.Nonsense on both counts. (The 12.5% flat Corporation Tax has been an absolute bonanza for employment of accountants and accounts staff generally.)
Yes, of course there's no way of calibrating it to ensure you won't have winners and losers."on average" - most tax changes have winners and losers
The issue isn't doing the calculations in a relatively simple P&L account. Anyone with a half an hour and a calculator can do those.A tax rate of 25% on all cash received from your tenant is remarkably simple to calculate compared to the current system.
I know a lot of small-time landlords who aren't able to do it themselves.
I think the flat rate makes some sense. Though one of the issues right now is that there is no reward for socially beneficial behaviour like keeping rents low. An alternative could be a sliding scale that depends on the individual rent charged - so someone renting out a single property at 2k per month is charged a higher rate of tax than another landlord renting out 2x properties at 1k per month each.It's a nice article that sets out all the options. I think policymakers need to decide whether they want to keep fiddling or do something radical.
Fiddling
- Allow LPT deducibility
- Full relief on mortgage interest
- Section 23-type reliefs
- Making rental profits eligible for pension contributions
- Reduce CGT rate
Radical
Tax all rental income at a flat rate of something like 25%. completely separately from other income. No deductions for anything except perhaps major renovations with the relief spread over several years. No CGT.
My guess is that they will go for a lot of superficial fiddling in favour of landlords that will leave the system more or less the same.
I understand what you're trying to achieve, but it's too difficult. Wouldn't take into account location, finish or any number of other variables why one house is worth 1k and another is worth 2k, even if they're both 3 bed semi-d's.I think the flat rate makes some sense. Though one of the issues right now is that there is no reward for socially beneficial behaviour like keeping rents low. An alternative could be a sliding scale that depends on the individual rent charged - so someone renting out a single property at 2k per month is charged a higher rate of tax than another landlord renting out 2x properties at 1k per month each.
Once the flat rate would be on profits less capital allowances and not on rents received/turnover I'd be all for it, and for the eligibility for pension contributions. I'd also add abolishing the ludicrous close company surcharge for "unearned" investment income that (ironically) only applies to mom & pop corporate landlords, not to the big guns.Flat rate of tax & making rental profits eligible for pension contributions would be a win.
The problem is that rental income is taxed as trading income when it is largely passive income.Once the flat rate would be on profits less capital allowances and not on rents received/turnover I'd be all for it,
With respect that's utter nonsense. A professional landlord who devotes time and energy to their rentals and who has strong skills in both negotiation and in screening timewasters and troublemakers will make far more money longterm than an amateur who lacks those skills and who doesn't bother working on it.The problem is that rental income is taxed as trading income when it is largely passive income.
The most conscientious landlord in the world will not make much more than a lazy landlord with the identical property next door. The property is doing most of the work, not the landlord.
Any income stream including a secure job or pension is a form of wealth.Rental property is wealth
Simplicity has nothing to do with logic, fairness or efficacy. Killing every first-born would be a very simple way to quell a housing shortage but nobody sane would argue for it.and is most simply taxed as a % of said wealth.
It is not. Rental Income is taxed as Unearned Income, and that is part of the problem.The problem is that rental income is taxed as trading income when it is largely passive income.
Continuing legacy of 1970s socialism. In Ireland we never learn from past mistakes.Rental Income is taxed as Unearned Income, and that is part of the problem.
All property is a form of wealth. I'd tax all property (more specifically the site value of the property). In fact there's an argument for lower taxed on properties that are rented out since they provide a social good and the income generated from them is taxed anyway.Rental property is wealth and is most simply taxed as a % of said wealth.
The minister should do a landlord sentiment and ask reason why landlords are leaving the market. Messages here show the many reasons and not because of increase in house prices. They should include landlords that have exited the market.As an aside, there are new notice periods coming in to protect tenancies. The information is on the Threshold website - increased notice days and 90 days now required for tenancies of 6 months or less. Other notice periods also increased. Announced by the minister for housing at the launch of a tenant sentiment survey earlier today.
You need lower tax rates on landlords (small landlords with one or two properties).
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?