Landlords need to be aware of changes.

February 8, 2016

No more so than now do Landlords need to be aware of impending changes  to their industry,  for the past year there has been major changes in the way they should operate and how their profitability should be  calculated, most recently are the changes to  their mortgage tax relief.

The most vunerable of landlords are those termed “accidental landlords,” they will be the least likely to be aware of the mortgage  tax relief changes taking place due to new legislation.  According to latest reported research from landlord insurance provider Direct Line for Business, 55% of new buy-to-let mortgage applicants are unaware of the mortgage tax relief changes.

Changes to the mortgage tax relief are set to be phased in from April 2017 with landlords no longer able to deduct mortgage interest payments before calculating their tax bill. They will instead get a tax credit equivalent to 20% basic-rate tax on this amount. Professional advice should be taken when dealing with individual tax returns and the way deductions are calculated.

The new tax rate has caused alot of concern in the industry and at present there are legal challenges being prepared against the proposed government legislation, also there has been a rise in the number of buy-to-let properties being bought in the name of a limited company so as to get around the additional tax cost, again professional advice should be taken with such matters.

Landlords are also set to be hit from April 2016 by stamp duty changes that mean anyone buying a second home or buy-to-let property will pay a 3% surcharge on their stamp duty bill.

 

 

Allen Walkey

Highly experienced businessman with a successful career in property sales and investment both in the UK and abroad. Now a freelance writer and blogger for the property and Investment Industry, keeping readers up-to-date with changes and events in a rapidly changing world.

You May Also Enjoy

Estate Agent Talk

Upfront information: homebuyers want confidence as much as speed

What movers want from upfront information, and it isn’t only speed Having a survey, legal pack and chain details before making an offer would help more than eight in ten respondents, according to LRG’s latest sales report Of the 553 who answered the question, 41% said they would offer with more confidence, although not necessarily…
Read More →
Estate Agents should not all look the same
Estate Agent Talk

How Financial Anxiety Drains Entrepreneurial Energy

Financial anxiety can consume the attention and stamina that business owners need for planning, problem-solving and leading a team. A late payment, an unexpected tax bill or a weak sales month may trigger worry long after working hours have ended. Over time, that mental strain affects sleep, concentration and confidence. The answer starts with creating…
Read More →
Letting Agent Talk

How to future-proof a rental property for changing tenant expectations

Over the past decade or so, tenants have become far more discerning. For more and more people, renting is a long-term prospect and today’s tenants expect their homes to be as safe and comfortable as any home they would own themselves. And as legislation around standards and health and safety in the private rented sector…
Read More →
Breaking News

More than a third of homes undergo price reduction

The latest research from GetAgent.co.uk has revealed that more than a third (34.4%) of homes sold subject to contract (SSTC) across Britain’s major cities have undergone an asking price reduction, with this figure climbing to more than half in Bournemouth, raising questions over whether sellers, and their agents, are pricing their properties realistically when first…
Read More →
Breaking News

‘Explosion’ in e-signature use at Land Registry spells progress for homebuying reform

The number of e-signatures used at Land Registry has exploded in the latest quarter — jumping more than ten times in just three months to 643, Novus Strategy can reveal. Qualified Electronic Signatures (QES) are a central plank of the revolution unfolding in homebuying because they reduce friction and save time. It’s a combination of…
Read More →
Letting Agent Talk

The Flats Above the Shop Problem

Why residential property hidden inside commercial ownership keeps causing trouble By Adam Hills, Client Services Director, LRG Living Markets Somewhere in many commercial property portfolios sits a small collection of front doors that was never really part of the plan. Many large and small retailers inherit residential property portfolios by default as part of mixed-use…
Read More →