Investors still set to benefit from £16.7billion in tax relief – despite changes
- 2nd February 2018
- Buy-To-Let Property News
Exclusive research by ludlowthompson highlights that rental property remains a highly attractive investment vehicle
Buy-to-let investors will still benefit from £16.7bn worth of tax relief, even after the government’s changes to the system are fully phased in by 2020, an exclusive analysis by ludlowthompson has revealed.
“That’s going to be music to the ears of investors worried about the impact of changes in tax relief on their income and the ability to continue to invest in the upkeep of their properties,” says Stephen Ludlow, Chairman at ludlowthompson.
The tax reliefs allow investors to offset against their rental income expenses such as mortgage interest; property repairs, maintenance and renewals; legal, management and professional fees; and rates, insurance and ground rents.
By way of comparison, landlords claimed £17.5 billion in property expenses last year, including over £7 billion in tax relief on mortgage interest and other financial costs.
Even after planned changes to tax relief are fully implemented, buy-to-let investors will still be able to claim approximately £6.4 billion on interest rate costs alone.
Landlords will be further encouraged by news that ludlowthompson's latest rental applicant statistics show an increase in the number of lettings applicants from 4300 in January 2017 to 5,300 in January 2018 a jump of 23%.
Stephen Ludlow, continues: “Despite recent cuts to these tax breaks they are still very valuable, highlighting that rental property remains a highly attractive investment vehicle.”
“These tax reliefs are essential to ensure that buy to let investors are able to invest in maintaining their properties to provide good quality accommodation. This is especially important in London where demand continues to outstrip supply.”
“Labour mobility continues to be central to economic strength.* However, if cities like London are to remain a magnet for home-grown and international talent, sustaining a vibrant, high quality rental market is essential. To do that, the system has to work well for both tenants and landlords.”
*OECD Economic Policy Reforms - Going for Growth Interim Report 2014
Despite recent cuts to these tax breaks they are still very valuable, highlighting that rental property remains a highly attractive investment vehicle
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