Ring-fencing housing losses ...Questions ?

[richard56]

Hi
So let us say the government brings in ring-fencing for residential property.

So how would it work?

Has it been tried before...? I believe Muldoon tried it.

What were the outcomes when it was tried?

How would it affect an investor that is doing long term holds and all his IP's are basically breaking even?

Thanks
Richard

[PC]

For some of us it will be very good.
Less people will be able to invest in property - so rental supply will decrease - then rents will rise.
Just another tax increase for the tenants to pay.

[Wayne]

How would it work - well how about losses from property investment can only be off-set against future profits from property investments. ie Ring Fence them.

[Harvey Specter]

Interestingly, losses from mixed-use properties (such as a bach which you use but rent out to customers as well) are going to be ring-fenced in some cases moving forwards.

[Bluekiwi]

I am thinking not so much of a problem for me.
I am not offsetting rental loss's against income.

It could cause a problem as I want to one day start making trading trust profit to off set against rental trust loss's.
It may knacker that.

But long term my rental trust will start making profits so I will soak them up, in time.

Its probably a smarter idea for labour to do instead of CGT, but they want the CGT headlines to get them in to power.

[speights boy]

Its probably a smarter idea for labour to do instead of CGT, but they want the CGT headlines to get them in to power.

That's what I am thinking.

They use the CGT as it is easy for the soundbites.
Once it power, they will implement 2 or 3 other changes to the tax code instead.
Ones that will have a greater and more immediate effect on some investments than a CGT will ever have.

[Gladdynook]

Ring fencing losses will make it harder for investors starting out - without that option, i would have struggled to get by in the early years. Once your portfolio grows a bit, and rental earnings increase, then there are no losses to offset anyway.

[Bluekiwi]

Ring fencing losses will make it harder for investors starting out - without that option, i would have struggled to get by in the early years. Once your portfolio grows a bit, and rental earnings increase, then there are no losses to offset anyway.

I would be interested to know what sort of time frame that is Gladdynock.
Of course its circumstantial, but for you, how long was "The early years" before you moved into this mode.
Cheers Paul

[drelly]

I would be interested to know what sort of time frame that is Gladdynock.
Of course its circumstantial, but for you, how long was "The early years" before you moved into this mode.
Cheers Paul

For me, it was only a few years if you don't count depreciation but I was buying in a time of fast capital gains and rent rises. I've also been doing considerable maintenance to avoid making a profit LOL

[Rosco]

Hi
So let us say the government brings in ring-fencing for residential property.

So how would it work?

Has it been tried before...? I believe Muldoon tried it.

What were the outcomes when it was tried?

How would it affect an investor that is doing long term holds and all his IP's are basically breaking even?

Thanks
Richard

Hi Richard,

If you are break even, as you put, then you won't have any losses to offset against other income, therefore ring fencing would have no effect on you.

Ross