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Where Taxpayers and Advisers Meet

WANTING TO BTL

JKPOLYMERS
Posts:4
Joined:Wed May 30, 2018 7:06 pm
WANTING TO BTL

Postby JKPOLYMERS » Fri Sep 21, 2018 2:22 pm

Hi

I'm looking to start a BTL but not sure who it's going to work with taxes, I've heard that ALL income will be taxable in the next few years. I can see from the market research that I've carried out, rents are increasing in certain areas meaning higher income will be declared even though the costs of the mortgage will be paid and maintenance if required.

Is it worth BTL now as I've earned and saved all I can to be able to try and make a future for my children?

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: WANTING TO BTL

Postby AdamS93 » Fri Sep 21, 2018 4:24 pm

It is certainly worth waiting for brexit to blow over (or up) before you purchase a BTL.

The government have introduced a number of tax increases for landlords so certainly less attractive than it once was. There are certainly far more attractive investments from a tax point of view - namely pensions but having a £500k pension pot is not seen as 'sexy' as having a BTL property in some peoples eyes.

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: WANTING TO BTL

Postby AGoodman » Mon Sep 24, 2018 12:16 pm

The main change is in relation to mortgage interest relief and it is explained well here (skip down to the 2020 part):

https://www.which.co.uk/money/tax/income-tax/tax-on-property-and-rental-income/buy-to-let-mortgage-tax-relief-changes-explained-atnsv0j6j782

Essentially, if you are a basic rate taxpayer, fine, if you are a higher rate taxpayer it dramatically reduces the relief and substantially increases your tax liability. The quantum of the difference obviously depends on how leveraged you are.


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