Britain’s landlords are asking for the Government to reverse changes it has made to tax relief on buy-to-let mortgages, a new report has found.
Paragon Mortgages put together a new report that states that the vast majority of landlords (9 out of 10) fully understand the implications of the tax changes and they would prefer the Government to change them back.
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The tax changes were originally announced during 2015’s summer budget by then Chancellor George Osborne. The idea is to phase those changes in over three years, starting from earlier this year, April 2017.
In the end they will mean higher rate taxpayers will no longer be able to offset all their mortgage interest against the rental income before calculating the amount of tax they’re due.
When landlords were asked what they think the newly elected Government could do for them they explained their wish for those tax changes to be reversed. They also said that they hoped for no further changes after that as the sector is in need of some stability as they put it.
The survey also revealed that 20% of landlords are planning to increase rents in order to cover any additional costs whilst some hope that the Government will exempt them from capital gains tax and stamp duty if they were moving properties into a limited company structure.
The research also shows that landlords are definitely doing their homework as 88% say they now fully understand the implications of the tax changes, a number that has increased from 71% six months ago.
John Heron, managing director at Paragon Mortgages, commented the findings:
“Having taken active steps in preparing for a difficult period of transition as the tax relief changes continue to be phased in, landlords are now facing up to the challenge ahead.”
“Higher tax charges for landlords have combined with a general increase in uncertainty to drive confidence levels down. However, whilst there are signs of lower demand it would appear that property yields are being maintained and that void periods are close to historic lows. This would suggest that despite the negativity around the market that the PRS continues to perform well,” he explained.
