Beware the pitfalls of buy-to-let investments – our Property Tax Guide can help

A new Residential Property Letting Tax guide has been produced by Moore Thompson.

The guide is an invaluable source of advice, aimed at helping landlords with the latest developments in the buy-to-let market.

In recent months there has been a major government shake-up of the booming buy-to-let property industry and there are a number of issues that landlords need to be aware of in 2016.

Chief among these is the three per cent surcharge on stamp duty land tax (SDLT) for buy-to-let properties and second homes which was introduced in April this year.

Alongside this new measure, George Osborne has also announced that from April 2019 capital gains tax (CGT) on sold property will now be due within 30 days of the transaction; a significant departure from the current rules.

Other changes will see mortgage interest tax relief for buy-to-let investors decrease over the next five years.

The deductions from property income for loan interest will be restricted to 75 per cent for 2017/18; 50 per cent for 2018/19; 25 per cent for 2019/20 and 0 per cent for 2020/21 and beyond.

Individuals will be able to claim a basic rate reduction from their income tax liability on the loan interest, calculated at 20 per cent.

The Government have also announced significant changes to the ‘wear and tear’ allowance, which may significantly affect landlords.

The guide includes information on: