More landlords realising impact of mortgage interest tax relief changes
More single property landlords are realising the implications of the changes to mortgage interest tax relief, and understand they could be moved into a higher income tax bracket.
According to research from the National Landlords Association (NLA), at the end of 2016, only 7% of landlords with a single property expected to be moved into a higher bracket, which compares with 16% today.
The changes to mortgage interest tax relief, which are being phased in between April 2017 and April 2020/21, mean that landlords who earn an income just shy of £43,500 could qualify for the higher tax bracket of 40%.
Single property landlords make up the majority – 62% – of UK landlords. As the tax changes take hold, many single property landlords may choose, or have no option but to sell their buy-to-let property.
Chief Executive Officer at the NLA, Richard Lambert, said: “Single property landlords are responsible for providing a huge proportion of the UK’s private rented homes, and these findings show that, slowly, more and more are waking up to the fact their tax bills could be significantly higher in the coming years.”
He continued: “Affected landlords will have the choice of either increasing rents or selling up – so either way it’s the people they currently home who look likely to suffer the most as a result of this damaging tax change.”
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