11 Jul

Landlords call for tax u-turn

Landlords call for tax u-turn

Landlords want the government to reverse the recent decision to alter tax relief on buy-to-let mortgages.

A survey conducted by Paragon Mortgages found nine out of ten landlords understand the tax legislation changes and would welcome a reversal.

The government’s plans are being introduced over a three-year period and it means higher rate tax payers will no longer be able to offset their mortgage interest against rental income before calculating tax liabilities.

The research discovered many landlords are concerned about the financial impact of the changes, as well as believing it could undermine the stability of the buy-to-let sector.

A total of 20 per cent of landlords are planning to increase rents to cover the additional costs, while a further 20 per cent are considering reducing their current property portfolio.

"Having taken active steps in preparing for a difficult period of transition as the tax relief changes continue to be phased in, landlords are now facing up to the challenge ahead," said John Heron, managing director of Paragon Mortgages.

He added: "Higher tax charges for landlords have combined with a general increase in uncertainty to drive confidence levels down. However, whilst there are signs of lower demand it would appear that property yields are being maintained and that void periods are close to historic lows."ADNFCR-1222-ID-801837732-ADNFCR

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