If you are an existing landlord you will be aware of the recent changes to tax allowances on furnished property, alongside proposed reductions to finance cost tax relief.
Many property investors and buy to let landlords are reviewing the viability of their investments as a result of these changes.
One extra element to add to the equation is the option of remortgaging now to take advantage of the excellent buy to let mortgage products currently available. This could help in a number of ways: -
1 – reducing interest rate costs.
2 – fixing the rate to quantify your interest costs for up to 5 years.
3 – switch from repayment to interest only or vice versa.
4 – release capital for additional purchases or property improvements.
So far so bland?
Possibly, however the proposed HMRC changes mean that finance costs incurred after 5 April 2017 could attract lower rates of tax relief – see the link below for full details: -
https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords
We have recently seen high demand from landlords looking to consider their options to examine whether a low rate / high fee product is the solution; giving lower costs in the future whilst obtaining full tax relief on the arrangement fee element of their refinancing prior to the rule changes.
If you are unsure as to the likely effects of the proposals on your property investments, we will happily work alongside your Accountants or Tax Adviser or introduce you to our Accounting contacts to help clear the fog!
Why not take local, face to face, independent mortgage and loan advice to smooth the whole process. We would be delighted to help.
Paul Hardingham and Tony Ibson are Mortgage and Protection Advisers at Innovate Mortgages and Loans. Both have over 20 years of experience advising individuals and businesses across the North East of England. They can be contacted for bespoke advice at paul@innovateml.co.uk or tony@innovateml.co.uk or call 0191 223 3514.
Think carefully before securing other debts against your home.
Your home or property is at risk of repossession if you do not keep up repayments on a mortgage or other loan secured on it.
Innovate Mortgages and Loans is a trading style of Innovation Financial Management Ltd.
