Free Valuation

Quick Search

Refine News

Changes to Tax Relief in Buy-to-Let Sector

In April changes will be introduced to tax relief in the buy-to-let sector of the market. These changes will affect landlords who own properties as individuals.

In April changes to tax relief will be introduced in the buy-to-let sector of the housing market.

Landlords who own residential properties as individuals are currently able to claim income tax relief on the total cost of interest on mortgages and loans.

The way this relief is calculated will change and it will be restricted to the basic rate of tax currently 20 percent. Under the new system finance costs will no longer be deducted from profit for the purposes of calculating income tax. Landlords will receive a tax reduction equivalent to their debt costs multiplied by the basic rate of income tax.

Some property investors may therefore find themselves in a higher tax band than they would have been under the current rules – the costs of this change for higher rate and additional rate taxpayers could be considerable, while for basic rate taxpayers there should be no net change.

The tax reduction will be calculated as a proportion of each individual’s finance costs, total income or property profit, depending on which is lowest.

Only private individuals and partnerships will be affected. The changes do not apply to companies, furnished holiday lettings or commercial properties.

It is worth seeking advice on whether the ownership structure of your rental properties is still appropriate to your circumstances.

For more information please click here

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.