"New Property Tax" - Tenants may have to pay?

Just looking at peoples thoughts. One of the reasons posters say that now is not a good time to buy is that you may be eligible for the proposed new property tax. Would I be correct in saying that if you rent you could be liable also, that is if we follow a similar model to that of the UK aka council tax:

From: direct.gov.uk/en/HomeAndComm … G_10037383

"Who is responsible for paying the bill?
There’s one Council Tax bill for each home. Usually the person living in the property has to pay the bill. Spouses and partners who live together are both responsible for paying the bill.

The person at the top or nearest to the top of the following list has to pay the bill:

• lives in the property and owns it
• lives in the property and has a lease (this includes ‘assured tenants’ under the Housing Act 1988)
• lives in the property and is a ‘statutory’ or ‘secure’ tenant
• lives in the property and isn’t a tenant but has permission to live there
• lives in the property (for example a squatter)
• has a lease of six months or more on the property, but doesn’t live there
• owns the property but doesn’t live there"

If, if, if…

Nothings decided until FF can work out how much they can squeeze out of us and how landlords can get relief on it. :angry:

Two different things are they not?

direct.gov.uk/en/HomeAndComm … G_10037383

Property tax - Just a tax?

You can’t design a tax that will be borne solely by the provider or by the purchaser of a good.
Tax the Landlord and they will look to increase rents to cover the costs. Tax the tenant and they will look for a reduction in rent to compensate.
Ultimately it will be shared by both. How much each bears will depend on market conditions

Regardless of how the Tax gets passed on, it may only suspend for a short time the fall in rental rates. I can imagine that FF will try to make so that it will push people into ownership but as with all their plans he market will undermine it. Unemployment and non lending zombie banks will will undermine their plan.

Well, if the rental market is falling, the only way you can claim the tenant is bearing any of it at all is that the might fall faster but for it…but rental is supply/demand driven pretty much and if the supply is there, the options for holding up the rent are somewhat limited.

To complicated and costly. I’m sure they’ll think up something though.

Whether tenants pay the tax directly or not isn’t the issue.

If a property tax comes in then both rents and property prices will have to adapt in order to reflect the new direct cost of occupying a property. If you buy right now then you buy at a price that doesn’t reflect that cost, if you buy later then you buy at a price that does reflect that cost.

That’s true, but if rents stopped falling today they would still suggest that sales prices are 30%+ too high. In other words, looking at the yield equation, it is not the rent levels that are out of whack, it is the sales prices. So even if the government wants to uphold rent levels (and rent supplements are being cut at the moment) it would not make much difference: investors will not see proper yields until sales prices plunge a lot more.

It does have some effect, however that allowance is constantly being reduced, there a thread a week or so ago about the latest cut I think.
The other factor is the Zombie bank element, how many property investors are currently being rolled over.

I know it’s easy to forget but it’s only just a year and a half ago that rental rates started to noticeably fall. They always lag property price falls, probably because of renewals contracts.
People will have burned through personal savings made during the good times to cover void periods on their investment properties but that money will run out.

This process seems to be playing out in fits and starts but it’s momentum is one way.

Good way to flush out dodgy landlords. Unless they want to pay the tax.