Proposals have been put in place to restrict interest relief for ‘buy-to-let’ landlords. Tax relief on mortgage interest payments on residential property will be restricted to the basic rate of tax (this will be phased in over four years from April 2017). This means that landlords, who get a tax deduction by using mortgage interest to reduce their taxable profits, will have less opportunity to do so.
Chancellor George Osborne says that this change will "create a more level playing field between those buying a home to let and those buying a home to live in", however many landlords feel that they are being unfairly discriminated against. Mary McQueen says “The changes will hit many small and private investors, however there is a high demand in Edinburgh for rental properties and the rental market will continue to remain strong.”
In addition to the curb in tax breaks for buy-to-let landlords, changes have been made to wear and tear allowance, the rent a room relief scheme, and insurance premium tax – all having an impact on landlords.