Mortgage tax relief on BTL properties

[Malcolm Buggeridge]

I'm thinking of dipping my toe into the BTL market for the first time in the light of poor pension performance and low returns on cash ISAs.

I'll be releasing some equity on my own house to do this though and will be getting a mortgage.

This means that for this to remain a worthwhile income stream, I would depend on mortgage tax relief remaining in place during the term of, say, 3-5 years (at which point I plan to sell up and cash in on the hoped for increase in value - we are, after all, at the bottom of the house prices curve (?!)).

So, my question to the esteemed financial sages of this forum is this. Do you think it possible or likely that this tax relief could be abolished in the next few years?

[fullyautomatix]

I know you are a dull sockie and a stupid one at that but I will still bite and ask , what the hell are you on about ?

Which country is this ? Not heard of a tax relief for mortgage in UK. Especially BTL. In fact I advocate a tax on the BTL scum parasites.

[northernladuk]

Do you mean you can offset the interest of the BTL against your income from it?

P.s don't even bother if you are only looking for 3-5 years in it. You are more likely to end up losing with costs of buying and selling, CGT etc taken in to account.

Saying that there is so much fundamentally wrong in the post I can only think this is just a load of crap you are making up

[fullyautomatix]

Do you mean you can offset the interest of the BTL against your income from it?

Perhaps he means capital gains tax, but is there a relief for BTL on capital gains ?

[DimPrawn]

Good News!

HM Revenue & Customs: Mortgage interest relief

This section gives estimates of the cost of income tax relief for mortgage interest payments.

Bad News!

Relief on mortgage interest repayments was removed on 6 April 2000. Mortgage interest relief for those aged 65 and over who take out loans to buy a life annuity (a home income plan) ended with effect from 9 March 1999, but existing loans will continue to qualify for the remainder of the loan period.

[eek]

Perhaps he means capital gains tax, but is there a relief for BTL on capital gains ?

There is no special treatment on the asset sale apart from your usual capital gains tax free allowance.

The original post is however badly written. If I read it correctly he is asking can Mortgage costs be taken from the rent on the BTL. The answer to that yes now, and I can't see it changing but who really knows what the future holds.

[fullyautomatix]

There is no special treatment on the asset sale apart from your usual capital gains tax free allowance.

The original post is however badly written. If I read it correctly he is asking can Mortgage costs be taken from the rent on the BTL. The answer to that yes now, and I can't see it changing but who really knows what the future holds.

I doubt he would mention it as tax relief if that was the case. You have to credit some intelligence to this sockie at least.

Anyway, mortgage costs from the rent is probably the only business model in BTL which makes it worthwhile and possible to do. Or else the bank wont provide a mortgage.

[northernladuk]

There is no special treatment on the asset sale apart from your usual capital gains tax free allowance.

The original post is however badly written. If I read it correctly he is asking can Mortgage costs be taken from the rent on the BTL. The answer to that yes now, and I can't see it changing but who really knows what the future holds.

Bearing in mind the interest is a cost to a business you would think it only natural it could be offset like any business model but the last line says it all. Common sense and reasonable assumptions are not a gaurantee it will stay that way.

If they do change it everyone will start looking for loopholes to put it through a business and HMRC are gonna have a bloody headache trying to regulate that many businesses handling a single property or two.... or just not tell the tax man they are doing it as I am sure is the case in a huge number of BTL's. But again.. who knows.

[Scrag Meister]

MIRAS

Died in 2000.

[Mich the Tester]

In fact I advocate a tax on sockies.

ftfy