Many people may have heard that there was a proposal to restrict 'tax relief' for private landlords in the UK Summer Budget. The Chancellor, however, has misled the people of the UK by presenting it as though it were a minor policy change, and only going to affect a few rich individuals. This is not true! Look at the link here, for more information:
http://www.property118.com/?p=76936
It actually ends landlords' right to claim all of their finance costs as part of running their business. This is a terribly dangerous precedent to set in the tax regime of the UK. What business might next have its costs disallowed in this way?
What's worse it, incredibly, re-defines this cost as 'income' on which you will be taxed! This will have a severe detrimental effect on cashflow and could spell the ruin for many landlords. You could even have a zero income (or less) in reality, but have to pay tax on a large fictitious income.
But this should not only be worrying landlords.
If you are in any of the following categories you could be seriously affected by the Summer Budget proposal:
1. If you rent out any property in the UK and you pay a mortgage on it, you are likely to be adversely affected.
2. If you are a tenant in the UK (rents will go up; tenants will be given notice by affected landlords, as they seek to sell or as their houses are repossessed).
3. If you are a home-owner in the UK (house prices could drop drastically as buy-to-let properties flood the market).
4. If you are planning to sell up in the UK in the next few years and/or planning to fund your move to Spain by rental income, you may have to think again.
5. If you are in any business where you depend on doing work for landlords (electricians, plumbers, builders, letting agents, etc.) you will all lose work and income.
6. If you are in any business at all (the knock-on effects on the economy are not yet known).
Basically, this policy is going to affect millions of people.
Because of this, a petition has been set up and has already amassed more than 6,000 signatures. If you a UK resident or British citizen and have a UK post code, you can sign.
Please follow the link, see what this means for you - you are not protected in Spain, if you rely on a rental income and/or own property in the UK. This could be the end of your Spanish dream!
http://www.property118.com/?p=76936