End of Landlord Tax Perk?

End of Landlord Tax Perk?

10:18 AM, 9th June 2015, About 7 years ago 9

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Over the last few months I have seen a lot of ‘noise’ about Landlords receiving an unfair tax break. That being the ability to offset mortgage interest payments against profit, whereas mortgage interest relief for homebuyers was scrapped years ago. Indeed a call to abolish this tax break was made by a columnist in this weeks Sunday Times. End of Landlord Tax Perk

Does anybody else feel a shiver from the winds of change?

David Oswold


Mark Alexander - Founder of Property118 View Profile

10:21 AM, 9th June 2015, About 7 years ago

Hi David

In my humble opinion, such articles are written by naive journalists who simply don't understand business.

They tend to be influenced by left wing thinking and write sensationalist pieces like this to sell newspapers.

Calls for the abolition of tax relief on interest charged on business debt are nothing new, they've been around for years. They are merely sound bites and do not stand up to scrutiny.

Romain Garcin

11:26 AM, 9th June 2015, About 7 years ago

Landlords do not get any more "tax breaks" than any business. In fact, they get less.

Especially, interests on financing loans are an allowable expense for all businesses.

Mark Alexander - Founder of Property118 View Profile

11:46 AM, 9th June 2015, About 7 years ago

Reply to the comment left by "Romain Garcin" at "09/06/2015 - 11:26":

Too true Romain.

Example: we cannot roll over capital gains on disposal but all other forms of business and investments I am aware of are not subject to this.


12:32 PM, 9th June 2015, About 7 years ago

If mortgage tax relief wasn't allowed then i for one would seriously consider selling up and doing something else as would many many other small scale private landlords, the powers that be are well aware of this and the housing mayhem it would create..I can't see this happening in the foreseeable...


13:56 PM, 9th June 2015, About 7 years ago

David - the analogy between landlords' and owner-occupiers' tax treatment in relation to residential property is a false one, but nonetheless popular because it feeds off people's dislike of private landlords and the perception that we are "getting something for nothing". Oddly, there is no such criticism when private companies own and rent out property and count their debt interest against their income, but small private landlords really get people riled up. So I agree there is a risk that this might gain some traction with the politicians, especially if they are hungry for revenue.

It wouldn't take much to change the rules: HMRC would simply say "we don't allow CGT rollover with rented property, and now mortgage interest has ceased to be a deductible expense. We judge that property is 'different' and we have the power to do this." This might be challenged in the courts, but given the mixed messages and different practices already adopted by HMRC in relation to housing, landlords could easily lose.

However I think it's unlikely because of the devastating impact on landlords when interest rates go up and the likely mass withdrawal of landlords from the rental market (and most lenders too).

Of course when you say to the man down the pub or the nutters on HousePriceCrash.com that the withdrawal of mortgage interest tax relief for owner-occupiers should logically be accompanied by the withdrawal of CGT relief for owner-occupiers (to level the playing field', and reduce the deficit and/or subsidise more "affordable" homes), you will be quickly shouted down. Somehow landlords being treated like any other business is unfair, but their extremely large subsidy and tax exemption is entirely fair and a simple fact of nature.

Gary Nock

17:57 PM, 9th June 2015, About 7 years ago

Agreed. This left wing property hating socialist Marxist claptrap gets trotted out every so often- although not quite as often now Ed Moribund and his mate Ed Balls (what an apt choice of name) have ridden off into the Electoral Disaster sunset.

I have always thought it strange that being a landlord isn't a "business" We purchase raw materials (property) and turn it into a rentable home. What is the difference between this and other businesses? Oh that's right- it's not a business because HMRC say it isn't. And we can't claim losses against our own personal tax.

Let's face it. Due to the left wing press landlords are not liked. But as stated by Mark and Romain, we are a "necessary evil" as without us there would be even less housing.And I agree -if mortgage interest was removed as a claimable expense then landlords would bail out in their thousands. Only cash rich investors would be able to invest in property so thus the left wing landlord hating brigade would only make the rich even richer, and the aspirational middle classes who invest for their futures even poorer. So society would become even more polarised.

Alan Loughlin

20:56 PM, 9th June 2015, About 7 years ago

and if interest were not to be an allowable expense what do you think would happen to rents?

Gavin Marshall

13:29 PM, 11th June 2015, About 7 years ago

I too have read these articles and am very concerned about it. I hope the emergency budget this year doesn't bring the bad news as that would tip my portfolio of 6 into the red even with current interest levels.

David Marshall

17:47 PM, 8th July 2015, About 7 years ago

If only I had put bet on this!!!!

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