Is Buy-to-Let dead ? A Cheshire estate agent promoting investment potential of Buy To Let, For you and your future, as mortgage interest rates climb
Section 24 means that private landlords can no longer offset mortgage payments The Government has made recent changes to individual landlord's tax relief. Since April 2020 buy-to-let landlords have had to pay income tax on the entire rental income, regardless of how much is taken by mortgage interest. Instead, this has been replaced with a 20% tax credit, meaning private landlords with a mortgage can no longer offset mortgage interest costs in full against income tax bills on rent. As a result, landlords now pay tax on rental income based on revenue rather than their profit after mortgage interest is paid. For those of you thinking of setting up a limited company, you’ll be glad to know that mortgage interest is treated as a business expense. That means if your property is owned by a limited company, you can minus the cost before paying corporation tax. If this is something you are considering, it's always smart to obtain financial advice from a registered tax expert. What are the implications of the Capital Gains Tax changes? There have been recent tweaks to Capital Gains Tax. This means that buy-to-let investors also face a heftier tax bill on profits when they sell up. The Capital Gains Tax rate on residential property is 28% for higher rate taxpayers and 18% for basic rate taxpayers versus 18% and 10% on other assets.
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Location: 66-70 London Rd, Stockton Heath, Warrington, Cheshire, England, UK, WA4 6HR
Photo credit: © Tony Smith / Alamy / Afripics
License: Licensed
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