Poll
60% of landlords expect impact from BTL tax changes
Almost two-thirds of landlords believe they will be affected by impending changes to both income tax relief and stricter mortgage affordability checks, new research suggests.
A survey conducted by Mortgages for Business (MFB) found that 60% of landlords expect to be impacted by changes that mean from April 2017 landlords will no longer be able to deduct mortgage interest payments from their turnover before declaring their taxable income.
The news comes just months after the National Landlords Association warned that some 440,000 landlords who pay the basic rate of tax could be forced on to a higher bracket after the change.
Despite these statistics, MFB revealed that 11% of those surveyed admitted that they still did not know whether the changes would affect them directly, while one respondent remained totally uninformed.
David Whittaker, CEO at Mortgages for Business, said: “We are still encouraging landlords who haven’t already taken professional advice on the matter to do so asap, as some may find that the new formula will tip them into the next tax bracket leaving them worse off.
“The new regime starts in April, so there’s not much time left to make strategic decisions and take action.”
These tax relief changes are set to follow the introduction of stricter affordability checks for buy-to-let mortgages, which were imposed on 1st January 2017.
Though this deadline has already passed, some 15% either did not know how revised affordability calculations would affect their borrowing or were completely unaware of the new guidelines.
A further 25% said they only partially understood the implications of these changes.
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