It’s no surprise that landlords are reportedly calling on the government to backtrack on changes made to mortgage interest tax relief.
According to the Paragon Mortgages Q2 2017 PRS Trends survey, nine out of ten landlords want the changes scrapped, and this was the issue which meant the most to landlords.
The changes, which affect individual landlords who draw an income from a residential property, will limit the amount of relief landlords can claim for costs, like mortgage interest, to the basic rate of Income Tax. This measure took effect in April 2017, but is being phased in gradually over four years.
The phasing in process is designed to help landlords adapt to the changes, allowing them time to explore their options and establish the best way forward. Landlords have also been advised to seek independent professional tax advice before making any changes to their portfolio, like moving into a limited company structure.
After scrapping mortgage interest tax relief changes, the second priority for landlords was, tellingly, for no more change.
The buy-to-let sector has had to absorb a number of new tax and stamp duty measures in recent years, including an extra 3% stamp duty surcharge placed on the purchase of second homes (and buy-to-let properties).
However, despite perceived instability in the sector in light of all the changes, research shows that confidence remains solid and the market continues to function well.
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