Illustration image of man using large scissors to cut tax lettering


Buy to let landlords are predicted to benefit from £16.7bn worth of tax relief despite tax changes being gradually introduced by the government, according to analysis by London estate agent ludlowthompson.


Tax relief has enabled landlords to offset against their rental income expenses including mortgage interest and other financial costs such as property repairs, maintenance and renewals, legal, management and professional fees and rates, insurance and ground rents.


The amount of taxes collected from landlords are expected to increase by £840 million a year by 2020-21 according to the Treasury, following the complete enforcement of the cuts in relief.


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In 2017, landlords claimed £17.5bn in property expenses government data has revealed.


More than £7bn was claimed in tax relief on mortgage interest and other financial costs and £3.7bn was claimed for property repairs and maintenance.


Landlords will still be able to claim an estimated £6.4bn on interest rate costs alone even after planned changes are fully put in to place.


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Stephen Ludlow, chairman at ludlowthompson, said: “Despite tightening, buy-to-let tax breaks are still very valuable, highlighting that rental property remains a highly attractive investment vehicle.


“Those tax breaks are essential to ensure that landlords continue to invest in maintaining their properties. If the tax breaks are reduced further then landlords will cut their investment in the properties they own – reducing the standard of UK rental accommodation.”


Ludlow added: “Labour mobility continues to be central to economic strength. However, if cities like London are to remain a magnet for home-grown and international talent, sustaining a vibrant, high quality rental market is essential. To do that, the system has to work well for both tenants and landlords.”


At City Landlord, we aim to provide you with peace of mind so you know that your buy to let property is covered – get a quick quote online today or by calling us on 0800 2944 546!


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