UK Landlord Forum / Life

Hi all,

I was hoping I could get a few signature and help on this. I feel very strongly about about this and how unfair this whole process is.

Would appreciate if I could get a few signature to start this off.

Thank you.

Click this link to sign the petition:
https://petition.parliament.uk/petitions/710299/sponsors/new?token=o1BBejBqBXy5PwmYQrfa

My petition:

Reintroduce tax relief allowing mortgage payments to offset rental income.

I want the government to reinstate tax relief allowing mortgage payments to be offset against rental income. This would assist small and accidental landlords in managing their costs, particularly during the current cost of living crisis, helping to sustain the private rental market.

Reinstating tax relief is essential for small and accidental landlords who are struggling with rising interest rates and the cost of living. Many rely on rental income to support themselves. Without tax relief, they may raise rents or sell properties, reducing affordable housing. This policy would help keep rents stable, allow landlords to maintain properties, and protect tenants during the cost of living crisis.

All signed Alfie. Probably a little late for myself but anything to help landlords as everything seems stacked against them at the moment . I've just put my 2 rentals on the market. I've come to the conclusion it's no longer worth it for myself. Good luck with the petition.

Quote from: Alchemist on December 17, 2024, 03:59:31 PMAll signed Alfie. Probably a little late for myself but anything to help landlords as everything seems stacked against them at the moment . I've just put my 2 rentals on the market. I've come to the conclusion it's no longer worth it for myself. Good luck with the petition.

Thank you.

I know what you mean, this was meant be our nest egg for me and my wife or even to pass onto the kids (lord knows they need the help).

Seems absolute joke now.

There are zero accidental Landlords so, apart from this going nowhere with a Government that is keen on getting all the income it can, it may actually rile folk up.

My view is that, yes, Landlords can have mortgages on their let properties (sometimes it's unavoidable) but my aim is not to, then it can be profitable and is a true nest egg, not a burden in disguise. Landlords who have this as their business model can succeed, surely, but it's flying closer to the sun. The suggestion that Landlords may raise rents without this relief is a bit suspect - they'll do it regardless - everyone knows that.

Ending allowing finance costs to be offset against income for tax purposes only penalised higher-rate taxpayers. Suggesting that it would help "small and accidental" landlords is a bit of a stretch.

The current solution limits the tax that can be deducted for finance costs to 20% (or more accurately the base rate tax percentage). So here are three examples of tax. A property generating £15k of income per annum, with interest costs of £8k, owned by an accidental landlord, a landlord managing through a limited company and a higher rate taxpayer (maybe someone already earning £50k before their rental income kicks in).

                           sm landlord   Ltd Landlord   higher rate landlord   
Income                    £15,000           £15,000            £15,000   
Interest                    £8,000           £8,000            £8,000   
Income/Profit            £15,000           £7,000            £15,000   
Tax Rate                   20%           19%             40%   
Tax calc'd                  £3,000           £1,330            £6,000   
Fin allowance           £1,600           £0                    £1,600
Tax Owed                  £1,400           £1,330            £2,800   
"Nett"                       £5,600           £5,670            £2,600   

This is how it would have looked before s24 (and is therefore what this petition proposes should be reinstated).

                           sm landlord   Ltd Landlord   higher rate landlord   
Income                    £15,000           £15,000            £15,000   
Interest                    £8,000           £8,000            £8,000   
Income/Profit            £7,000           £7,000            £7,000   
Tax Rate                   20%           19%             40%   
Tax Owed                  £1,400           £1,330            £2,800   
"Nett"                         £5,600           £5,670            £4,200   

The only people who have lost out under s24 are higher-rate taxpayers, and so the only people who'd benefit from going back are higher-rate taxpayers.

There are a small number of people (I was one) for whom the method of calculation puts them into the higher rate tax bracket where they wouldn't have been previously, because the tax is calculated before the interest relief is factored in. That has a very small impact on income tax but is more significant for CGT because the rates are based on income tax thresholds. I don't know how many people would be affected by that in real life.