April 07, 2017
Mortgage tax relief changes have now come into effect, but the majority of British people are unaware of the alterations and how they could be affected.
New research has found that 85% of 2,000 people surveyed were unaware that tax changes are taking place. Landlords are now restricted with the amount of mortgage interest that they can offset against tax on their property investments, which could directly affect a large portion of the country. As Landlord profits are slashed due to the lost revenue from tax relief, they may need to increase rents in order to recoup this.
The government also released their consultation on the lettings fee ban on the 7th April. You can read the paper and submit your opinions on the controversial proposal here. This could see landlords bearing even more costs as agents are forced to charge more for services. It has been estimated that rents could rise by as much as 30% as a result. Landlord tax relief will be withdrawn completely by April 2020, with the expectation that costs will be passed on to tenants – the fact that the vast majority of people are not yet aware is worrying.
Landlords must stay on top of their taxation, and new property investors must inform HMRC of their investments. A brief guide to landlord taxation can be found here. Try to adopt good habits when it comes to storing and filing receipts. If you receive physical receipts, consider scanning them and storing them digitally. You may also want to look into acquiring software to keep your tax documents organised.
If you are having trouble keeping track of rent, please get in touch to see how we can help you. We have lots of different services for landlords and agents to help take away the stress of managing rent arrears.