LETTINGS NEWS: Two months to prepare for landlords’ tax relief changes
It’s now just two months before some landlords with buy to let properties will encounter the first phase of changes to how their mortgage interest tax relief is applied.
Currently tax is due on profits at your highest rate of income tax. But from April this year, and each April until 2020, this system will be changing gradually.
The government’s goal is that by 2020 all landlords will pay tax on the full amount of their turnover, less tax relief fixed at 20 per cent.
This fixed tax relief will apply to all landlords, even those who pay higher levels of income tax, well above the 20 per cent threshold. However, landlords who own their investment properties outright and thus do not make mortgage payments will of course be unaffected.
The new system may be complicated, especially at first, so any local landlord should get in touch with their letting agent who will be able to recommend expert advice.