An HIP loophole?

[Moo]

From Landlord News, produced by The Money Centre :

"As we go to print, there appears to be a loophole in the legislation relating to buy-to-let properties: properties with sitting tenants will not need to provide a HIP if marketed for sale as they are classed as commercial. This could mean that sellers who find it difficult to sell may fill their houses with tenants to avoid the need for a HIP. Although it is uncertain how long this loophole will exist."


Could this tactic be any use to owner-occupiers?

 

[skier-hughes]

I doubt it as commercial properties would be subject to a variety of taxes, which your main prinicple residence isn't.

 

[Moo]

I have a little house that I've been renting out for the last ten years or so, and the only tax I pay is on the net rent I receive.

 

[thiambal]

Except, when you come to sell, if it is not your primary residence you can be subject to capital gains tax.

Although I imagine there are a number of tax loopholes - I think there is something around penions funds? I think you can also avoid it if you re-invest the money straight into property whic I guess most people would be doing in the case of this suggestion. - Mind you, I am no accountant - so I may be wrong.

In any case, people would need to take careful advice before renting out their house in order to avoid £1000 on one of these lovely fluffy packs

 

[pambrose]

Hi

Just saw this. It's actually not a loophole at all! Its the way that the law was designed specifically to eliminate the hassle for owners of let properties.

This is well entrenched and is extremely unlikely to change - if your property is not available for sale with vacant possession, you do NOT need a HIP.

Personally, I think a loophole, is where you, as a married couple, (you have to be married) grant a tenancy to your spouse and THEN put your property on the market. Sure - it's hassle, but THAT's a loophole

Peter
The Partnership
http://www.thepartnershiplimited.com

 

[Craig]

Also, just pop your house on the market now for big £££ - houses already for sale at the time the legislation comes in dont need a HIP.

 

[pambrose]

Ah ha .. no Craig, you missed the wrinkle that they put into the legislation three weeks ago - - can't belief you missed it - it's a rivetting read!!!

There was a website called hipfreehomes.co.uk - rather aggressive in tone and somewhat belligerent, but they thought that this would work. Interestingly, it is run by the ex IT Director of Railtrack ... I will say no more...

The change in the regulations mean that after October 31st 2007, if your property doesn't have a HIP, you'll need to get one.

If you're interested in reading more about the regulations, we've diced them up into easy-to-read chunks!!!

http://www.thepartnershiplimited.com/html/regulations.html

All the best

Peter

 

[Craig]

darn - I better take down that For Sale board...

 

[Penners]

From Landlord News, produced by The Money Centre :

"As we go to print, there appears to be a loophole in the legislation relating to buy-to-let properties: properties with sitting tenants will not need to provide a HIP if marketed for sale as they are classed as commercial. This could mean that sellers who find it difficult to sell may fill their houses with tenants to avoid the need for a HIP. Although it is uncertain how long this loophole will exist."


Could this tactic be any use to owner-occupiers?

Given the problems that so many landlords appear to have with their tenants, and the raft of legal requirements that they have to comply with, I reckon it would be a tactic of desperation, Moo! I believe it can also be difficult to sell a property that has sitting tenants in it, except to another potential landlord.