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 Will Buy-To-Let Tax Relief Changes Put Landlords Off?

Will Buy-To-Let Tax Relief Changes Put Landlords Off?

9th July 2015

The Chancellor presented his summer Budget yesterday, in which he announced a substantial crackdown on mortgage interest tax relief. From 2017, the amount landlords can claim as relief will be set at the basic rate of tax – currently 20%.

The aim of this is to 'level the playing field for homebuyers and investors’ and has led some to speculate that this will cool the buy-to-let market and make property investments appear less attractive.

However, buy-to-let investment properties will still offer an attractive opportunity to savvy investors taking a longer-term view and looking to make money from capital growth. Although these changes will likely mean that landlords won’t make quite as much money on a monthly basis, the capital growth gains and the solidity of property investment coupled with the strong demand for rented properties are so strong that buy-to-lets will still be popular.

Head of Lending at Mortgage Advice Bureau (MAB), Brian Murphy, commented that the changes to buy-to-let mortgage interest tax relief announced yesterday will be good news to those landlords who feared it would be abolished completely. “The decision to halve the 40% tax relief may not be popular, but will be far easier for landlords to adjust to. A complete removal of mortgage interest tax relief could have led to higher rents for tenants.”

If you have any questions about the buy-to-let tax relief changes or would like to discuss buying an investment property, contact SP Residential today on 01622 692206.