Landlord
Mansion Tax?
Lib Dems commit political suicide?
In one of the craziest political moves since 'the longest
suicide note in history' the Liberal Democrats have proposed taxing
all assets - a radical extension from their original 'Mansion Tax'.
Such a taxation could have a devastating effect
on landlords, especially in the South of England where a small
portfolio could easily exceed £2 million on a valuation even if
the rebuilding cost (used for landlord insurance rating) is
relatively modest.
It is not known whether this tax would only apply
to individuals or would extend to companies. If the former then it
should be quite easy to form a company and transfer the assets into
it, or it may be that a simple division between partners could
reduce the tax liability substantially.
Net earnings on buy to let property are not that
high and any substantial tax rate would remove any commercial
reason for letting out property.
There are ample logistical and theoretical
reasons why this tax would be even more unpopular than the
'Community Charge, imposed by the Conservative part in the 1980s.
At the moment, it seems unlikely that the Liberal
Democrats will be sufficiently powerful after the next election as
they currently only have popularity of 8% in the latest opion
polls. However this could change.
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