Landlords thinking of selling up?
New rules will remove landlords right to make no fault evictions. However landlords have been hit by a number of tax increases in recent years:
Mortgage interest relief restricted to basic rate since 2017 initially at 75% of interest and now 100%, this means higher rate and even those just below higher rate landlords pay more tax than before.
- Capital Gains exemption cut to 6k at April 23 and then 3k next year means landlords may pay thousands more in CGT if a property has risen in value
- Lettings relief for CGT only applies now to cohabitation periods
- The deemed PPR where a landlord has lived in a rental themselves reduced from the final 36 months to 18 and then 9 months in 2020
As with all tax payers the freezing of tax bands means income is more heavily taxed as it rises with inflation.
All of the above measures plus soaring mortgage interest rates and a housing market that has gone down 1% last year after years of growth means many landlords have decided to invest elsewhere.
Many landlords are looking to sell their rental properties as their fixed deals are ending and higher mortgage rates mean rental profits are going to be very low.
Remember selling a rental property will usually see a capital gains tax charge and this must be reported to HMRC within 60 days of completion. It is always wise to consult a tax advisor before selling a property.
News item by Marsland Nash Associates, Accountants Newton Abbot Devon
