60% of Landlords To Pay Higher Taxes Under Government Reforms

In his summer budget, the Chancellor announced that from 2020 mortgage interest relief for residential landlords will be restricted to the basic rate of income tax and this will be applied to turnover, not profit. As a result, six in ten landlords face being pushed from paying the basic rate to the higher rate according to a recent RLA survey. The RLA has met with officials at the Treasury to raise concerns about the impact this will have on landlords’ ability to invest in much needed new housing. RLA Policy Director David Smith says “The findings of our survey are deeply concerning. Many landlords face the prospect of a nasty surprise when they meet with their accountants. Having felt that they were not affected by the Budget measures, many will seriously consider whether it is worth continuing in the market when faced with this tax bombshell. It cannot be right that many landlords face seeing their income tax increase without an increase in their income. All the evidence shows that we need more, not less, rented housing, With almost 90% of landlords being individuals renting out just a handful of properties each, it is only by supporting this group that we will boost the supply of homes to rent. The Budget announcements risk undermining the potential for growth. Even at this late stage we are calling on the Government to pause and provide more time assess the impact on the market.”

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