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how does the budegt affect BTL?
cypher007
Posts: 384
Forumite
ive just had a very scary time watching the budget.
can someone tell me how and when the new mortgage tax relief will affect me?
at the moment we claim the full amount as its an interest only mortgage. the payements are £196 per month.
can someone tell me how and when the new mortgage tax relief will affect me?
at the moment we claim the full amount as its an interest only mortgage. the payements are £196 per month.
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Comments
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When is no earlier than April 2017. How is dependent on your personal circumstances - i.e. what rate of tax you pay.0
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im on the basic rate.0
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You have nothing to worry about then. It only affects those who pay 40% tax and have BTL income.0
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This is politics at its worst.
BTL landlords do not have an advantage: For all businesses interests on loans are allowable expenses.0 -
Chancellor George Osborne's announcement will cap the amount that landlords can claim on mortgage interest payments...Read the full story:
Summer Budget 2015: Buy-to-let landlords hit by reduced tax breaks
Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.0 -
jjlandlord wrote: »This is politics at its worst.
BTL landlords do not have an advantage: For all businesses interests on loans are allowable expenses.
exactly, I'm interested to see how this will be implemented...
surely every landlord will be buying their properties in a Ltd envelope now (and the corp tax reduction will make that even more attractive, although the divi tax change may offset that)0 -
jjlandlord wrote: »This is politics at its worst.
BTL landlords do not have an advantage: For all businesses interests on loans are allowable expenses.
That may be true, but it isn't what he said.
What he did say was that it gave BTL buyers an advantage over other buyers - and being able to write off the tax on your interest certainly does help the old affordability of a mortgage ...0 -
the article in your link is wrong.Chancellor George Osborne's announcement will cap the amount that landlords can claim on mortgage interest payments...Read the full story:
Summer Budget 2015: Buy-to-let landlords hit by reduced tax breaks
Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
mortgage interest relief will be limited to basic rate tax relief, not as the article suggests, which is that mortgage interest which can offset tax is limited to 20%.
the difference is that all interest will be allowed for tax, but the max reduction in tax you can get is 20% of that amount, so a basic rate tax payer loses nothing, but a higher rate tax payer gets taxed 20% of the total mortgage interest and an additional rate payer 25%0 -
martinsurrey wrote: »exactly, I'm interested to see how this will be implemented...
surely every landlord will be buying their properties in a Ltd envelope now (and the corp tax reduction will make that even more attractive, although the divi tax change may offset that)
If they have a Ltd co with tens of thousands sitting around ready to buy the properties, you could be right. I somehow doubt it.
All in all, I doubt what you predict will come about big time, just to minimise the impact of cutting the tax relief from 40% to 20%.0 -
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