Covid-19 Bounce Back loans for property businesses16:06 PM, 5th May 2020
About 3 weeks ago 46
How much worse off might you be as a result of the limitations on claiming BTL mortgage interest as a taxable expense?
We’ve built a calculator to help you work it out.
First of all, allow me to explain the issue ….
Tax relief on Buy-to-Let mortgages is to be reduced to the basic rate of tax phased in over four years commencing 2017.
The Bank of England recently reported that Buy-to-Let mortgage balances amounted to circa £200 billion.
Assuming an average interest rate of just 3% that equates to interest of £6 billion a year.
Given that most landlords are likely to be 40% tax payers (or soon will be!) the loss of 20% tax relief for 40% tax payers means that landlords are likely to be around £1.2 billion a year worse off as a result of the Summer 2015 budget.
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