Under the government’s ongoing plans to remove mortgage interest tax relief for landlords, it will be restricted to 25% from April 2019 and, from April 2020, it will be reduced to 0%.
Previously, landlords were able to deduct all of their finance costs from their property income to arrive at their property profits. But, to address concerns that buy-to-let landlords were receiving tax advantages that homeowners couldn’t, the government decided to gradually phase out mortgage interest tax relief.
Once it has been fully phased out, landlords will instead receive a tax credit equivalent to 20% of mortgage interest to offer relief for finance costs.
We advise all of our Landlords to seek professional tax planning advice and are happy to recommend a tax accountant if requested.