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Treasury offices, Great George St.
Photo: Wikimedia Commons |
The changes in tax credits may have made the headlines, but in fact private landlords were the biggest losers in last week's budget, when chancellor George Osborne changed the rules for the deductibility of mortgage interest for rental properties, effectively killing off the economics of buy-to-let.
From 2017, the amount of interest that landlords can claim in tax relief will be limited to the basic rate of tax – greatly increasing their tax bill. The treasury described this as a way to "level the playing field for homebuyers and investors" - but in fact it does nothing of the kind. It is simply a tax grab directed at landlords, greatly worsening the economics of renting property, and meaning that landlords will pay tax on money they have not even earned.