Almost half a million landlords will end up paying more tax due to the scaling back of mortgage interest relief introduced by former Chancellor George Osborne, according to a survey.
The National Landlord Association’s latest panel found 22% said they would be pushed into the higher tax bracket once planned taxation changes are phased in from April 2017 meaning mortgage interest payments or any other finance-related costs can no longer be deducted from turnover.
Assuming 2million landlords in the UK, 22% would mean that 440,000 are now preparing for a higher tax bill.
Richard Lambert, chief executive of the NLA, said this showed the government was speaking “complete tosh” when it said only a small number of landlords would be affected by the changes.
The NLA says it has met with housing minister Gavin Barwell and is also due to raise its concerns with the Financial Secretary to the Treasury, Jane Ellison.
Lambert said: “When the Government announced these changes last year, it claimed they would only hit a small proportion of higher-rate tax payers. We now know that is complete tosh.
“The Government must look to amend these tax changes and minimise the impact on landlords and their tenants – something that could easily be achieved by applying the rules to only new loans written after April 2017.
“Unless this happens, landlords will face an impossible decision of whether to increase rents and cause misery for their tenants, or to sell up and force their tenants to find a new home.”
CONTACT US if you have any questions