Tax change leaves its stamp on buy to let

Macclesfield Express - - SPORT -

BUY to let can be a com­pli­cated busi­ness, and some­thing most po­ten­tial land­lords need straight­for­ward facts about if they are to com­mit.

Victoria Bury, as­so­ciate within the prop­erty team at SAS Daniels, com­ments re­gard­ing market be­hav­iour and how things are shap­ing up as we head to­ward a new year. She said: “We have seen a re­cent slow-down in the buy to let market since April. How­ever we are still see­ing buy to let pur­chasers.”

“Due to the stamp duty changes in re­la­tion to in­vest­ment prop­er­ties, and also the pro­posed changes in mort­gage tax re­lief, own­ing a buy to let prop­erty is not such a suc­cess­ful in­vest­ment as it has been pre­vi­ously,” said Victoria. “How­ever that’s not to say that there aren’t land­lords who are still mak­ing a suc­cess of do­ing so. My ad­vice would be to take le­gal ad­vice and con­sult an ac­coun­tant to un­der­stand the tax im­pli­ca­tions be­fore de­cid­ing to pur­chase a buy to let prop­erty.”

And the im­pli­ca­tions for ‘ac­ci­den­tal’ land­lords?

“Un­for­tu­nately this hap­pens quite fre­quently,” said Victoria. “What was the perfect home 10 years ago may be no longer fea­si­ble. A pos­si­ble op­tion is to rent out the orig­i­nal home and move to a more suit­able place. It is im­por­tant to take fi­nan­cial ad­vice and if you de­cide to pro­ceed to use a rep­utable let­ting agent to man­age the let­ting. They will per­form credit checks, en­sure that the ten­ants de­posit is held in a Govern­ment-ap­proved de­posit scheme, col­lect the rent and deal with any main­te­nance is­sues.”

Le­gal & Gen­eral Mort­gage Club di­rec­tor, Jeremy Dun­combe com­ments on the cur­rent sit­u­a­tion from an al­ter­na­tive an­gle. He said: “Over the past nine months, the Buy to Let market has un­der­gone a num­ber of sig­nif­i­cant reg­u­la­tory and tax changes.

This lay­er­ing of new reg­u­la­tion by the pre­vi­ous Govern­ment, com­bined with the im­pact of Bri­tain’s de­ci­sion to leave the EU, has made it a very busy year.

“While April’s Stamp Duty tax rise clearly left a mark on the market in the form of fluc­tu­a­tions in de­mand, both be­fore and after its im­ple­men­ta­tion, this tax change alone is not enough to make Buy to Let a sig­nif­i­cantly less at­trac­tive propo­si­tion.

“Even with changes to tax re­lief loom­ing on the hori­zon for land­lords, on­go­ing record low in­ter­est rates could still make bor­row­ing to in­vest in a Buy to let prop­erty a fea­si­ble al­ter­na­tive to tra­di­tional sav­ings ac­counts.”

Victoria Bury

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