Danger of Serious House Price Fall Due to Buy to Let Tax Changes

One in four buy-to-let investors sell up due to new tax

A quarter of buy-to-let investors say they will sell their rental properties as a result of the Government’s draconian tax changes – a move which commentators say could destabilise the property market and cause rents to surge. A survey of almost 1,000 experienced private landlords found that 25pc have already sold, or  are planning to sell, following the Government’s plans to remove their ability to deduct their mortgage interest costs from their rental income before calculating their tax bill.

This dramatic change was announced in the August 2015 budget and will start to take effect from next year.

Hardest-hit will be those property investors paying higher rates of tax (40pc or 45pc) and who have large mortgages.

Instead of being able to deduct mortgage costs, landlords will have a 20pc tax credit, which will leave many higher-rate taxpayers with squeezed profits and some falling into a loss after the change begins to be phased in in April.

Lower-rate taxpayers may be pushed up a tax band, losing many of the associated benefits.

Landlords in buy-to-let companies are not affected, prompting many to consider incorporating.

The study, by the Residential Landlords’ Association, follows a previous survey which found that 56pc of landlords will increase rents to cope with the tax changes.

Blog Post from The Telegraph

See details of our Guaranteed Rent Scheme here

If you have any comments, please email the author of this article and click on the link above

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors



Registered Office: Woodgate Studios, 2-8 Games Road, Cockfosters, Hertfordshire, EN4 9HN | Registered in England and Wales | Registered Company No. 3961047 | VAT Registration No. 752 6015 48

 

Social Media Auto Publish Powered By : XYZScripts.com
Google Rating
4.8
Based on 119 reviews
js_loader