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UK buy-to-let landlords claimed £17.7bn in tax relief last year – claim

Despite government cuts, a new report claims that buy-to-let landlords in the UK claimed £17.7bn in tax relief last year, up from £17.4bn the previous year.

The study, undertaken by ludlowthompson, suggests that even once all of the government’s planned reductions to buy-to-let tax relief are fully implemented by 2020, landlords will still be able to offset £16.7bn of their expenses against rental income.

Restrictions to tax relief introduced since 2015 include changes to the way wear and tear allowance is calculated and the amount of income tax relief available on interest on mortgages.

Landlords were able to claim £7bn in tax relief on mortgage interest and other financial costs in the last year.

A further £4.1bn was claimed for property repairs and maintenance.

Landlords are still able to claim tax relief when purchasing furniture for a rental property under wear and tear allowance.

Stephen Ludlow, Chairman at ludlowthompson, said: “The tax grab on buy-to-let investment is unwelcome but it has not undermined the attractions of buy-to-let especially when compared to the volatile stock market.”

He added: “You’re still able to offset the vast majority of your costs - ensuring landlords will still benefit from tax relief on a high proportion of their rental income.

“Tax reliefs are one way that can incentivise landlords to continue investing in their rental properties thereby improving the quality of rental stock across the UK. If landlords are not allowed to offset their costs, they may be dis-incentivised from investing in buy-to-let – and that would impact the supply and quality of rental property as a whole.

“Policy-makers need to ensure they still encourage landlords to invest in buy-to-let. They are essential for ensuring a strong supply of high-quality rental property. This helps improve labour mobility, particularly in large economic hubs such as London. The government should look to keep further intervention in the sector to a minimum.”

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    What a bad article, obviously person who wrote it doesn't understand business and taxation, costs incurred of running a business, isn't tax relief its expenses. Like the cost of a persons wages in a business, the cost of operations, building are costs incurred, thus an expense to create a profit, not tax relief!!
    The fact that section 24, is the 1st time in UK financial accounting practice, that tax is taken on turnover, should be a worry to every business in the UK, tax is only every taken on profits, now you can pay tax on turnover, not make a profit and be in constant losses with full taxation.....
    That would sent many business under in the UK, and so it will be in the PRS as it continues to shrink making many more homeless.

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    It’s a our largest cost especially if u want to build a portfolio I hate this word relief it’s a lie it’s a COST and this year you are going to start seeing carnage in the PRS unless u have incorporated like myself .

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    Since the average tax rate was probably around 30%, another way of presenting this info was that landlord paid almost £60 billions in revenue expenditure in providing homes for those who couldn't or wouldn't buy their own. This figure is probably an underestimate, given the proportion of properties own outright and ignores the actual ca

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    Since the average tax rate was probably around 30%, another way of presenting this info was that landlord paid almost £60 billions in revenue expenditure in providing homes for those who couldn't or wouldn't buy their own. This figure is probably an underestimate, given the proportion of properties own outright and ignores the actual capital investment made by landlords, which probably exceeds £1 trillion.

  • Paul Barrett

    Of course no mention of the £9 billion in lossses that LL suffer each year caused by tenants mostly rent defaulting ones; not including the 30000 LL properties that are repossessed as a consequence of rent defaulting tenants!!
    So now with S24 if you have one of those wrongun tenants who doesn't pay rent and has to be evicted because they refuse to vacate you will be paying tax on your mortgage debt interest but with no income to pay for it!!!.
    The Irish have just abolished their less stringent version of S24 due to all the things occurring that have already been stated.
    Gonna be lots more homeless.
    Perhaps time to invest in a B & B cos that will be where lots of the homeless will be housed by desperate councils who all support S24!!!!

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