Landlords liability could more than double over the next four years following the changes to landlords tax, meaning that landlords need to run their portfolios as efficiently as possible to maximise returns.
The way that rental income is calculated has changed, with relief on mortgage interest getting phased out over the next four financial years. For example, under the previous landlords tax arrangement, a 40% rate tax payer with a rental income of £12,000 would have had a tax liability of £1,080. However, over the next four years this is going to more than double to £2,580.
This change, which was introduced last month, comes on top of the additional stamp duty that landlords now have to pay and the removal of the automatic 10% deduction allowable for wear and tear.
Andrew Sanderson, managing director of AKS Residential, is offering advice to landlords in Derby, following his vast experience as a landlord himself and within the property market. He said: “All combined, these changes don’t make for a very friendly tax regime for Landlords.
“Property can still be an excellent investment but it is going to be increasingly important to run your portfolio as efficiently as possible and maximise your possible returns.
“In light of these tax changes, our team of experts are offering free, no-obligation reviews of property portfolios, as well as general help and advice to property investors.”
Although the tax changes seem a gloomy prospect for many landlords, Andrew reveals how Derby landlords may have the upper hand when compared with other city-based property investors, adding: “One advantage that Landlords in Derby have is that the rental yields available are higher than what are achievable in many other parts of the country, so it will still be possible to have a profitable property portfolio.
“Landlords can make the most of these hurdles by reviewing their property portfolios with estate agents now, in order to ensure that the property is being well advertised in order to get the best price possible.”
For more information, please visit: https://www.aksresidential.com/
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