Budget leaves generous tax breaks for investors – for now

Many buy-to-let investors feel like they’re in the Government’s firing line at the moment, as a raft of new rules seem designed to make renting out a property less appealing. There were no new announcements in the Budget but a significant change to buy-to-let taxation  will be phased in from next month.
From next month, landlords will face restrictions on the tax relief they can claim on mortgage interest. Currently, property investors can claim this relief at their marginal rate – if they are a higher-rate taxpayer this is 40% and if they are an additional-rate taxpayer this is 45%.
From 6 April, landlords will only be able to deduct 75% of mortgage interest costs from their rental income. Further reductions will be phased in, eventually restricting relief to the basic rate of income tax of 20% for all landlords from 2020.

Action to take

It is still possible to earn money as a landlord, even if you’re not using a limited company, but it takes more planning. Talking to an expert could help you analyse  the profitability of your property portfolio and identify the best way forward.

You can read full document HERE

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