Free Valuation

Quick Search

Refine News

Chancellor Announces Reductions In Tax Relief On Private Rented Homes

The Chancellor has announced that he is reducing tax relief on private rented homes.  Mr. Osborne said that the income tax relief will be cut to the basic rate, currently standing at 20%.  This measure will be “gradually” phased in from 2017.  

Currently buy-to-let landlords can offset their mortgage interest payments against their income whereas homeowners who live in their properties cannot.

The buy-to-let market has boomed in recent years and from April its popularity has intensified when the pension initiative came into force enabling those over 55 to withdraw their pension in a lump sum with many choosing a rental property option to supplement their retirement income.

The Bank of England warned last week that the growing popularity of the buy-to-let market posed a risk to financial stability as it reduced the number of homes available for first-time buyers and inflated prices.

This measure will almost double the effective cost of borrowing for a taxpayer on the highest rate of tax. Currently interest payments of £100 only cost £55 after tax relief, but will cost £80 from 2020.

Share this article

Other News Items

  • Everything you need to know about becoming a tenant

  • The Nation's Most Active Markets

  • Online auction - the modern way to buy and sell property

Free Valuation

click here to find what
your property's worth






This site uses features that require cookies to be stored on your machine. To enable these features, click 'OK'

For more information on cookies and the features that use them please click here.