A recent survey of lettings agents and landlords has identified that the reinstatement of Section 24 mortgage tax relief is top of the list of requirements from the sector.
The survey compiled by PropTech platform Goodlord, gathered responses from 1,500 agents, landlords and renters to create their ‘Renting Done Right’ manifesto – making a series of demands on the government.
A common theme running through the document is that the lettings industry now requires incentivisation to encourage more investment, with 37% of responding letting agents and 29% of responding landlords saying reinstating mortgage interest tax relief should be the government’s top priority in this respect. Overall, in the survey, some 77% of landlords want some form of financial incentives to boost investment.
Before Section 24 was amended in 2017, like other businesses, landlords were able to deduct loan (mortgage) interest from their income tax – at that time it was also possible to offset mortgage various fees and other loans. Now tax is payable on all rental income upfront – essentially taxing turnover rather than net profit. Instead, landlords now have only a basic rate reduction from their income tax liability for their finance.
In response to the question: “Which proposals to incentivise landlords should be the Government’s top priority?” the need for consistency and simplicity from government scored strongly.
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