Small Landlords are being pushed out of the market due to harsh tax relief cuts


Small Landlords are being pushed out of the market due to harsh tax relief cuts

Number of smaller BTL Landlords is reducing each year because of the cuts to tax relief and of course the increased stamp duty introduced back in 2015

Cuts to Tax Relief means that all landlords are gradually losing the ability to deduct the interest charged on their Buy to Let mortgages and other related costs from the rental income that they receive.

In fact, by April 2020 they won’t be able to deduct any mortgage expenses to reduce their tax bill and instead they will receive tax credits based on 20% of the mortgage payments

In addition, from April 2020 new rule is being introduced for accidental landlords which will have an effect on Capital Gains Tax.

Accidental Landlord is someone who didn’t intend on renting their own home but due to personal circumstances have ended up doings so. In instance, they could have either inherited the property or moved with partner to a new property and kept their own property or bought a new home and kept their own in addition.

BTL Landlords with small portfolio are very important to the rental market, so the impact these changes & new rules may have will put off individuals from investing and overall have a negative effect on supply of rental properties long term as well as tenants with rising rents

Image Credit: Photo by Bruce Mars on Unsplash

Information sourced & for full article visit Property Reporter

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