There are some changes happening in 2019 which buy-to-let landlords need to be aware of
Tax Relief Changes
Firstly, in 2019 the changes to tax relief continue as the ability to deduct a number of allowable expenses along with mortgage and other finance expenses from rental income and just pay tax on the difference is phased out.
From 6 April 2020, tax relief on finance costs will be restricted to the basic rate of Income Tax
You’ll still be able to deduct some of your finance costs when you work out your taxable property profits during 2019/2020 tax year, as highlighted in the table below.
Tax year
|
Percentage of finance costs
deductible from rental income
|
Percentage of basic rate tax
reduction
|
2017/18
|
75%
|
25%
|
2018/19
|
50%
|
50%
|
2019/20
|
25%
|
75%
|
2020/21
|
0%
|
100%
|
If you are unsure how this will affect you, we urge you to take some professional advice. There is also more information on the full impact of the changes and case studies published by HMRC which can be accessed on www.gov.uk
Tenant Fee Ban
As you are probably now aware, changes are taking place in the industry which from June will prevent letting agents from charging the tenant for referencing.
The move by the Government is designed to make renting a home more affordable for tenants.
Please be assured that we are currently exploring a number of ways to minimise the impact of these changes for you, whilst maintaining our current quality of service.
We will, of course, keep you updated over the coming months.
