tax breaks for the rich

“Tax breaks for the rich” the new cry from the socialist journalists against the new proposed tax breaks for buy to let properties. Never mind the fact that the people who benefit from buy to let are those people who can’t afford to buy their own home, I should know, I’m one of them. Being a student, it is all to clear how much richer my landlord is than I am, but does his wealth hurt me? Certainly not, in fact it benefits me enormously. I get to live in a house that I could not hope to afford outright, and what’s more I am not liable for any normal repair costs to the property and I can leave the house easily without having to find a buyer first (within the terms of the contract of course). So am I hurt if it is more attractive for investors to buy properties for the express purpose of letting them out? No, and neither is anyone else, on the contrary, we are benefited by the increased competition by having more choice and lower cost.

Of course some could come out with the argument that the buy to let industry has pushed first time buyers out of the market, and now less people can afford homes for that reason, but the housing bubble is coming to an end, it was not only buy to let properties that pushed prices up, to claim so would show a complete lack of understanding of the situation.

The other implication is that it is only rich people who can afford buy to let properties, I agree that the average person who would choose to do so would be a high earner, but taxing a high earner simply because the choice is easier for them to make is unreasonable, there is no law stopping a low earner from saving money up in order to get a buy to let mortgage. One comment from Mr. Crooks, an independent financial advisor also surprises me,

"This is a tax break for the rich funded by all taxpayers. The money would be better spent encouraging people on average incomes to save more for their retirement,"

The tax break is simply a reduction on the rate of tax paid on this particular investment when it is used specifically for pensions, when you take someone’s money from them, and then later give some back, the only person who you are hurting is the person you took the money off in the first place. Mr. Crooks comment emanates from the socialist/communist fallacy that tax money belongs to everyone, it doesn’t, it belongs to those people from whom it was taken, those people who earned it, Mr Crooks’ comment is simply a request to redistribute wealth.