Important Tax and Legislation Changes Affecting UK Landlords
With multiple changes to UK tax legislation, it’s important to keep track of which changes will be relevant to you, and how they will affect your bottom line.
As of 17th April, mortgage interest tax relief for buy-to-let landlords will be limited to 20% - a change that is most likely to affect higher rate tax payers, and those with high mortgage costs.
The changes will come into force incrementally between 2017 and 2020, allowing landlords to claim 75 percent of their finance costs (including mortgage interest) under the existing system in 2017, 50 percent in 2018, 25 percent in 2019 - until the whole sum passes over to the news system in 2020 - under which landlords will be eligible to receive a 20% credit on the mortgage interest.
In April 2017 there are also new laws that have come into force under the Housing and Planning Act. These include new laws on Rent Repayment, and banning orders for landlords that consistently breach regulations. The Act also allows for future statutory requirements for electrical safety checks - but details are not yet finalised.