Buy to let landlords were among those feeling less than happy with the recent budget as they saw a key tax savings perk removed.
Property investors have been treated kindly for many years under successive governments who have seen the value they bring to the private rented sector. Keeping houses in good condition and helping supply hasn’t been enough however to avoid this latest change in tax laws which will affect full time as well as part-time landlords.
Buy-to-let landlords have until now been able to claim the full amount of tax relief on their mortgage interest payments but this has been viewed as unfair by the Chancellor and something of a perk.
While it is not being abolished altogether, landlords will only be able to claim at a rate of 20% which is the basic rate of tax. This according to the government levels the playing field between homeowners and investors.
The tax relief for landlords was previously set at the top level of tax they paid, so for wealthy property investors this was up to 45% rather than the 20% they will soon be entitled to.
People involved in the industry have been critical of the new rules saying that it will lead to investors pulling out of buy-to-let and more competition for housing among tenants.