Of all the buy-to-let changes that have been announced or introduced recently, landlords believe that the new rules around mortgage interest tax relief will hit them the hardest, according to a Simply Business poll.
The poll, voted on by almost 800 landlords already, asked which buy-to-let change has had, or will have, the most impact.
Landlords have recently been affected by a slew of new rules, including a stamp duty increase for second home purchases and changes to the wear and tear allowance, but itís the hit to mortgage tax relief thatís irked landlords the most, with 31 per cent saying that it will have the greatest impact.
Mortgage interest tax relief changes
Under the new rules, which will be phased in between 2017 and 2020, landlords in higher income tax brackets will no longer be able to claim tax relief of up to 45 per cent on their mortgage interest payments.
Instead, all landlords will only be able to claim back up to 20 per cent, in line with the basic rate of tax.
This will mainly impact on high-earning landlords, although the change may push some basic rate taxpayers into the higher tax bracket.
This has caused a surge in the number of landlords buying property through limited companies so that theyíre liable for 20 per cent corporation tax instead of up to 45 per cent income tax.
Other buy-to-let changes also impact landlords
Although the change to mortgage interest tax relief placed highest in our poll, it was closely followed by the new wear and tear rules, voted for by 29 per cent of landlords.
These changes mean that landlords can now only claim for the wear and tear costs they actually incur (backed up by receipts) rather than a standard annual allowance.
Coming in third place with 26 per cent of the votes was the stamp duty hike for second home purchases, which came into force in April. Changes to capital gains tax mustered 14 per cent of the votes.
Want to have your say in the vote? You can check out the original poll within the article here.