Over a fifth (22%) of landlords will face higher taxes as a result of buy-to-let changes introduced by the former chancellor, George Osborne, according to a recent survey.
The study, by the National Landlords Association (NLA), found that 22% of landlords will be pushed into the higher tax bracket when planned tax changes are phased in from April 2017. The forthcoming change will reduce the amount of mortgage interest that landlords can offset against tax.
Assuming there are two million landlords in the UK, 22% would mean that 440,000 investors are now preparing for a higher tax bill.
The Chief Executive of the NLA, Richard Lambert, insists that this shows that the Government was speaking “complete tosh” when it said only a small number of landlords would be affected by the change.
The NLA has met with the Housing Minister, Gavin Barwell, and is also due to raise its concerns with the Financial Secretary to the Treasury, Jane Ellison.
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Lambert comments: “When the Government announced these changes last year, it claimed they would only hit a small proportion of higher rate tax payers. We now know that is complete tosh.
“The Government must look to amend these tax changes and minimise the impact on landlords and their tenants – something that could easily be achieved by applying the rules to only new loans written after April 2017.”
He warns: “Unless this happens, landlords will face an impossible decision of whether to increase rents and cause misery for their tenants, or to sell up and force their tenants to find a new home.”
The NLA has calculated the proportion of landlords in each region that will be affected by the tax change:
|Region||Proportion of landlords that will move into higher tax bracket|
|East of England||30%|
|Yorkshire and the Humber||24%|