4 out of 10 Landlords Buying More Property

4 out of 10 Landlords Buying More Property.

Research by letting and estate agent Martin and Co with over 4000 landlords has found that nearly half of them plan to buy more investment property despite the changes to taxation of rental income starting in April 2016.

The Summer Budget in July 2015 announced that landlords will from April 2016 only be able to offset property expenses against property rental income profits at 20% tax relief. What this means is that if you are already a higher rate taxpayer at 40% or an additional rate taxpayer at 45%, where currently property expenses can be offset against rental income at your highest rate of tax i.e. 40%/45% this will be reduced to only allowing 20% tax relief. This measure is designed to either discourage wealthier people investing in buy to let property ‘full stop’. Or if the decision is to retain property or buy more property for the Treasury to collect more tax.

The survey results are surprising but perhaps the results are indicative of either 1. A greater number of basic rate taxpayers owning investment property or 2. Higher rate taxpayers owning property but with a plan to move into the basic rate tax bracket when/if they slow down at work or indeed retire and retain the rental income.