Kensington Mortgages has published a graphical guide that outlines the upcoming changes for buy-to-let investors.
Changes have into effect today, following the Chancellor’s announcement of a reduction in tax relief in the Summer Budget and a rise in Stamp Duty in last year’s Autumn Statement.
Kensington’s guide provides buyers with an overview of how these changes will affect those looking to invest in a buy-to-let property. The lender has estimated that the increase in stamp duty on second properties could increase the cost of investing in buy-to-let by around £4,500.
In addition, landlords also face important changes to the Wear and Tear Allowance, which will be replaced by a system that only allows them to claim tax relief when replacing furnishings.
The infographic also includes clear information about the phased implementation of reduced tax relief for higher rate and additional rate payers, which will begin to be introduced in April 2017.
The full guide is available to download here.
Steve Griffiths, head of sales and distribution at Kensington, said: “As an industry, we are still digesting the contents of the Prudential Regulation Authority’s consultation paper about underwriting standards in buy-to-let. But it is important to remember that today marks the beginning of a raft of changes already introduced recently by the government and this has the potential to cause confusion even amongst the most savvy of landlords. Moreover, given that some of the changes will be implemented over the course of a few years, keeping up with these developments can be difficult for landlords who may be juggling their day-to-day work with managing their buy-to-let properties.
“To help buyers understand these tax changes, Kensington is pleased to release this buy-to-let guide, which provides clear information about what landlords can expect. We hope that both mortgage advisers and their buy-to-let clients will find the guide useful and easy to understand.”