Buy To Let Tax Changes
Major Buy to let tax changes to shake up the buy to let market.
New government policies and regulation from Europe will see the buy to let market change for good from April 2016. Major tax changes:
- From the 1st April 2016 anyone buying a second property (whether it is to be used as a second home or a buy to let) will pay an additional 3 percentage points on top of the standard stamp duty land tax rates.
- Tax changes will see landlords taxed on the turnover of rent and it is this change which will have a major impact on landlords.
- From the 2017/2018 tax year through to the 2020/2021 tax year the amount of mortgage interest that can be deducted from gross rent will reduce in 25% increments to nil. A tax reducer of 20% can then be applied.
Speak to a qualified accountant for tax advice to see how you will be affected.
Is Buy to Let Dead?
In a word, no. The UK still needs landlords and private landlords are essential to the housing market. The proposals are intended to make Buy to let less attractive to the masses and will hopefully free up more property for home owners including first time buyers who are at present in competition with property investors for the lower end ‘first time buyer’ properties. We expect that landlords will increase rents to counter the changes to tax.
For more information on buy to let mortgages please speak to the buy to let experts at Fox Davidson. Call 01179 897950, email firstname.lastname@example.org or visit the website for more information www.foxdavidson.co.uk/buy-to-let