Buy-to-Let changes
As you are no doubt aware the buy-to-let market has endured many changes over the last few years and some of these are still being implemented. If you have forgotten or just want a reminder here are the main points.
- Stamp duty – additional stamp duty on second property purchases which of course includes BTL.
- Tax relief – change to the way it is applied and therefore affecting higher rate tax payers.
- Rental income – change to the way it is added to your overall income therefore possibly putting you in a higher rate of tax band.
- Wear & tear allowance – removed and replaced with an actual cost basis for certain allowable items.
- Changes to rental criteria – Prudential Regulatory Authority (PRA) implements minimum rental criteria.
- Portfolio Landlords – Criteria changes affecting landlords with 4 or more mortgaged BTL properties.
- Energy Performance Certificate (EPC) – change to minimum E rating.
- House in Multiple Occupancy (HMO) – change to licensing laws.
Gone are the casual days of purchasing a BTL property to gain income or capital. You now have to really consider if and how you intend to purchase a property and how the new tax system may affect you before you do anything. If you already own a BTL property or considering buying one, then it is even more important for you to seek all the guidance you can from both mortgage advisers and tax specialists/advisers or an accountant.
If you wish to discuss any of these points then do hesitate to contact me.
