Landlords Claim Billions In Tax Relief
The UK's landlords claimed a record amount in tax relief last year despite new fiscal regulations, one lettings agency says.
According to ludlowthompson, landlords claimed £17.7 billion in relief, which is up slightly from the previous year's figure of £17.4 billion.
Now the agency says that once the government's planned reductions for buy to let tax relief have been implemented by next year, landlords will still be offsetting £16.7 billion of expenses against their rental income.
This is despite a clampdown on tax since 2015 which saw changes to the wear and tear allowance being introduced and the reduction in income tax relief for mortgage interest.
In a breakdown of the figures, the agents say that £7 billion in mortgage interest tax relief, plus other financial costs, were claimed last year.
£4.1 billion was claimed by landlords for their property repairs
Their figures also highlight that another £4.1 billion was claimed by landlords for their property repairs and maintenance.
The agency says that landlords can still claim tax relief when buying furniture for their rental home under the wear and tear allowance.
The firm's chairman, Stephen Ludlow, said: "The buy to let investment tax grab is unwelcome but it has not undermined the attractions of BTL, particularly when compared to stock market volatility.
"Landlords are still able to offset most costs and ensure they will still benefit from tax relief on a high proportion of rental income."
However, he warns that the government needs to encourage landlords to invest in BTL to help deliver a supply of high quality rental homes and future intervention in the sector should be 'kept to a minimum'.
Landlords may be hit with new agent costs
Meanwhile, it's been claimed that landlords could be facing new administration fees from letting agents as they look to recoup the income they will lose through the upcoming letting fees ban.
Phil Spencer, the TV property star who runs an advice site called MoveIQ, has written in a national newspaper saying that the fees levied on tenants by agents have been 'unfair' and these led to the ban's creation.
He added that the ban comes at an awkward time for letting agents and that they will probably have to impose an administration fee of some sort on landlords which, until now, they had imposed on tenants despite the prospect of losing landlords as clients.