Thursday, April 27, 2017

Taxes, Property Values, and the Illusion of Making America Great Again

The targeting of "non-doms", people who live in Britain but claim permanent residence abroad, has trigger a London property crash that many have worried about for months. Non-dom status shielded income abroad, thus, reducing the total taxes paid. It's removal in 2015 exposed foreign residences to higher tax bills, and as new data suggests, triggered falling property values as money flees.

That was thanks to new stamp duty rules introduced at the beginning of last April, which hiked stamp duty on second homes and led to a buying frenzy just before the rules were introduced, source

Many in America view Trump's tax plan as the plan that will make America great again. For this to happen, it needs to be passed, not discussed endlessly. Most important, any tax reduction proposal cannot be quietly offset by rising taxes at the municipal and state levels. Both are happening faster than the headlines will acknowledge. Raising local taxes (property, licensing, fees, etc) to rescue bloated budget deficits, will send US property prices tumbling not only in Britain but also America.

Headline: Buy-to-let investors to challenge tax hike in court

Wealthy property investors are mounting a legal challenge to the Government's proposals to increase tax on buy-to-let investments.

They hope a judicial review will overturn the controversial "Clause 24" of the 2015 Finance Bill, in which the Government introduced plans to prevent landlords offsetting mortgage interest costs against rental profits before calculating tax.

These tax changes, which will apply to existing investment properties as well as future purchases, will result in some buy-to-let investors paying tax even where they generate no profit or are loss-making.



Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.