The gradual restriction of tax relief for buy-to-let mortgage interest has received much publicity since the process commenced 5 April 2017.
From that date, tax relief is converted from a straight forward deduction against business profits into a basic rate tax deduction.
If you continue to be a basic rate taxpayer as these changes roll-out, you will see no increase in your income tax liabilities. You may see an increase if you are, or become, a higher rate or additional rate income tax payer.
The changes have and will occur as follows:
Buy-to-let landlords need to quantify how these changes will impact their income tax liabilities in the coming years and we can help.
A final planning note, it is possible to borrow money by extending the mortgage on your own home. This makes sense from a cost saving point of view as the arrangement costs of the re-mortgage will likely be less as will the rate of interest charged. However, be sure to take the following into account:
Planning is a must-do for prospective, and existing, buy-to-let landlords. Please call if you would like to consider your options. There are no short-cuts. Creating a well rounded business plan that considers the tax changes highlighted above are a prerequisite to achieving success in your property business.