Landlord Tax Relief Court Battle Date Set

Landlord Tax Relief Court Battle Date Set.

Many landlords and buy to let owners will be aware that tax relief on mortgage interest expenses starts to be reduced over a 4 year period as follows:

Landlords will be able to obtain relief as follows:

• April 2017 to 2018 the deduction from property income (as is currently allowed) will be restricted to 75% of finance costs, with the remaining 25% being available as a basic rate tax reduction
• April 2018 to 2019, 50% finance costs deduction and 50% given as a basic rate tax reduction
• April 2019 to 2020, 25% finance costs deduction and 75% given as a basic rate tax reduction
• April 2020 onwards all financing costs incurred by a landlord will be given as a basic rate tax reduction

An action group of landlords has been formed and over £100,000 raised via a crowd funding platform to fund legal costs to fight the government on these changes.

A date at the Royal Courts of Justice has been set for an initial hearing on 6^th October 2016. 

Comment

The so called “tenant tax” or landlord tax will not just hit landlords pockets, we suggest it may also increase rents for tenants so that landlords can maintain net rental yields i.e. investment returns.