Buy-to-let tax changes could be the next pensions crisis, landlords have claimed.
The National Landlords Association (NLA) is warning that 70% of buy-to-let investors are reliant on the property to fund their retirement, so the extra taxes will hit their later life savings.
Using its own Quarterly Landlord Panel plus research by Mintel and ONS figures, the NLA claims 68% of landlords see buy-to-let as a safe way to save for later life.
The NLA cited ONS stats showing the average retired household spends £21,770 on living costs each year. An individual retiree would need £15,000 more than the full basic state pension of £6,359, which is why it says many have turned to buy-to-let.
Richard Lambert, chief executive of the NLA, said: “As a consequence of Government policy over recent decades, almost 2m people are reliant on their property to fund their later years, but the changing tax regime will substantially reduce the income they receive from these investments and so compromise the retirement plans of a significant number of hard-working people.
“Around a quarter of UK landlords are already retired, and 37% are aged 55 or over, so there is a pressing need to tackle these issues without delay.”
And there you have the obscenity that was Osborne’s tax policy. People encouraged into BTL. Spun a yarn about they would be taking control of their own financial futures. Don’t rely upon the state, don’t be a burden.
Now the rug pulled from under their feet.
The government should be ashamed but politicians don’t do shame.
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So people who have enough money to afford a second+ home to let are having to pay a little more tax. Oh boo hoo! So they should, good thing too!
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Over this, landowners should now have the option to demonstrate they could manage the cost of their reimbursements if rates rose to an incredible 5.5 percent — known as a pressure test.
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