Tax changes top worries for today’s landlords
Friday 08 September 2017
Nearly 40% of landlords in a recent Simple Landlords Insurance survey cite reduced tax relief on mortgage interest rates - known as the Section 24 tax changes - as the biggest factor affecting their investment strategies.
Up until now, landlords have been able to deduct the cost of their mortgage interest payments BEFORE they pay tax. From April, that will start to change, and over the next 4 years 100% of finance costs will subject to tax at a rate of 20%.
As a result, many landlords will end up paying more tax on their property income, and may be pushed into a higher tax bracket.
So how are landlords preparing for next Spring? Well some are choosing to go down the route of incorporation, side-stepping the changes by investing as a Ltd company. But for those with smaller - or more complex - portfolios, transferring everything into a company structure can be a headache in itself.
Another route could be to go for a hybrid model, and that’s the recommendation of this week’s guest blogger on Simple Landlord’s Landlord Hub - Tony Gimple from LessTaxForLandlords.
Read more here about his take on Section 24, and your options as a landlord.
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