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0 pointslkdfjlkdfjlg2y ago0 comments

> Why should a landlord be unable to deduct business expenses from revenue before calculating taxable profit, when all other businesses can?

I think you nailed it. This is effectively the government saying "renting is not a business".

Think about it. The ability to "deduct expenses" is one of the characteristics of businesses. Individuals also can't deduct rent, food etc from their taxes.

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4 comments · 2 top-level

rahimnathwani2y ago· 2 in thread

  This is effectively the government saying "renting is not a business".

Yes, but only if you're an individual landlord. If you register a company and buy the property through that, the normal rules apply and all interest expense is deductible. Of course, the mortgage might be harder to get or more expensive, as it's no longer secured on an individual's assets and future income.

globular-toast2y ago

Isn't a mortgage secured on the asset itself (the house)?

rahimnathwani2y ago

In the USA, most mortgages are non-recourse loans, i.e. if the bank forecloses and sells the property for less than the outstanding loan balance, they can't go after the borrower for the difference.

In the UK, the borrower is on the hook for the full amount of the loan.

tmnvix2y ago

This just makes it easier for investors to outbid homebuyers. If you allow deductions on interest payments, why not for occupiers too? Of course that could open up a whole can of worms and potential loopholes for avoiding income taxes.

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