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

Breaking News

First-Time Buyers Prioritising ‘Forever Homes’

A third of first-time buyer purchases are semi-detached properties, as young people turn to ‘forever homes’   Barclays mortgage data shows semi-detached properties rose in popularity in August, accounting for 33.5 per cent of first-time buyer purchases Four in 10 Barclays first-time buyer customers chose mortgages allowing them to complete their repayments over a 30+…
Read More →
Estate Agent Talk

Closing the gap on client relationships and recommendations

New research from iamproperty has highlighted the growing disconnect between what buyers and sellers want from their agent and what they experience, which could be killing recommendations from happy clients. iamproperty’s quarterly consumer survey revealed that only a third of respondents (32%)¹ would recommend their agent following their experience. With many agents relying on recommendations…
Read More →
Estate Agent Talk

Northern Ireland to expect over 25,000 new home movers

Belfast-based estate agency John Minnis has revealed that Northern Ireland is to welcome an estimated 25,000- 30,000 new arrivals from the UK and Europe over the next five years, as migration to the region reaches its highest levels in more than a decade. Recent figures show that 11,700 people relocated from other parts of the…
Read More →
Breaking News

Red tape and rising costs stifling new-build availability across the capital

The latest analysis from London estate agent, Benham and Reeves, has revealed how protracted building timelines are preventing the capital’s housebuilders from delivering the level of new-build housing stock required to meet demand, with new homes currently accounting for just 7.5% of all properties listed for sale across London. Benham and Reeves analysed the latest…
Read More →
Estate Agent Talk

UK’s new wave of ‘second cities’ offers strongest yield growth for property investors

The latest research from West One Loans has found that whilst investors may continue to favour the nation’s key cities such as London, Birmingham, and Manchester, a new wave of ‘second cities’ is delivering the strongest growth in rental yields. These emerging markets are offering investors the chance to achieve attractive returns, driven by rising…
Read More →
Estate Agent Talk

Decline in change of use further constricting housing supply

Jonathan Samuels, CEO of Octane Capital, believes that a decline in conversion projects could ultimately prevent the Government from hitting its ambitious housing delivery targets, as the firm’s latest analysis has revealed that the number of homes created through change of use has fallen sharply in the last five years. Octane Capital analysed official Government…
Read More →