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Is now the time to sell due to the buy-to-let tax changes

Is now the time to sell your buy-to-let property?

The latest buy-to-let tax changes give you one or two additional considerations. But BTL remains a great investment.

Property laws rarely stand still. Legislation is in constant flux. What can be trusted to be steadfast, however, is the rental market itself: it isn’t going anywhere. Despite the perception of dark storm clouds gathering, residential letting is - and will continue to be - a buoyant and thriving market. For logistical reasons, economic restrictions or the sheer freedom of not being tied to a mortgage, people will always want, and need, to rent property. It follows that those people will always need landlords like you and agents like us to provide homes to let.

However, the tax laws that came in last year have appeared to stifle the ambitions of a few buy-to-let landlords. But while the measures aren’t the most inviting prospect for those looking to invest in property, there are simple, legal ways around these changes.

An outline of the buy-to-let tax changes

Previously landlords were able to offset mortgage interest payments against rental income. This tax relief, however, is being phased out swiftly. In 2017 it was reduced to 75% - and the 2018-19 tax year has seen that come down further still to 50%.

How does this impact the rental market?

The statistics don’t lie: there has been a marked reluctance among would-be landlords to begin their property investment portfolio. The good news is that there’s been no let up in the demand for lettings. Quite the opposite, in fact. There’s never been a better time to invest in a buy-to-let!

Will this make a difference to your investment?

It’s a different system, with new rules. Yet it’s worth noting that putting your funds into brick and mortar remains one of the safest, surest ways to invest. Each landlord’s circumstances are completely different, so it’s wise to seek expert advice from specialists in property lettings and financial investment.

What should you do about tax?

All landlords have different properties, different portfolios and different financial circumstances. Yet there is a way that you can alleviate the tax burden through landlord expenses that can be deducted from your tax bill. Those expenses include costs such as cleaning, legal fees, utility bills, service charges and administration costs. Even agent fees can be used as an allowable expense. There are many ways you can make changes to your personal circumstances to recoup those costs. In short: with the right advice, letting out property can be every bit as profitable as it’s ever been.

Want some unbiased advice?

With the average age of new landlords dropping and more people renting than ever before, property letting is clearly still an incredibly healthy market to be in. That comes with complex responsibilities, underpinned by legal stature. But here at Belvoir Cambridge we know property, we know the local area and we know what will rent well to help maximise your financial returns. We can also connect you with tried and trusted accountancy and financial experts.

If you want like to arrange a free consultation to discuss your opportunities, please feel free to contact me directly. Or get in touch with the Belvoir Cambridge office.

You may also be interested in:

>> 13 legal obligations you must abide as a landlord
>> How to maximise your rental income in Cambridge
>> Can you change letting agent as a landlord?

Georgina Gray 
Branch Manager
Georgina.gray@belvoir.co.uk
01223 352225

Georgina Gray is the Belvoir Estate Agency Cambridge Branch Manager. Born and raised in Cambridge, she is a genuine local property expert with 10 years experience in the local property market. 

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