Chancellor George Osborne has announced that mortgage interest tax relief for buy-to-let homebuyers are to be restricted to basic rate of income tax, currently 20 per cent.
He says the measure, which will address "unfairnesses in property taxation", will be phased out "gradually" from 2017.
"Buy-to-let landlords have a huge advantage in the market as they can offset their mortgage interest payments against their income, whereas homebuyers cannot. And the better-off the landlord, the more tax relief they get. For the wealthiest, every pound of mortgage interest costs they incur, they get 45p back from the taxpayer” Osborne told MPs.
"All this has contributed to the rapid growth in buy-to-let properties, which now account for over 15 per cent of new mortgages, something the Bank of England warned us last week could pose a risk to our financial stability. So we will act – but we will act in a proportionate and gradual way, because I know that many hardworking people who’ve saved and invested in property depend on the rental income they get" he said.
This will certainly be interesting to watch over the next few months and we will keep you up-to-date as things develop.
No comments:
Post a Comment