To ‘Buy to Let’ or not to ‘Buy to Let’ that is the question!

As an IFA I have often discussed with my clients the possible financial returns and also the responsibilities of considering investing in the ‘Buy to Let’ property market as opposed to

Unit linked investments such as ISA’s or a Pension. Recently, the Chancellor has decided to financially hit ‘Buy to Let’ investors quite hard which may tip the balance against this option, encouraging many to invest in other areas. Thus, from April anyone buying a property for investment will be required to pay a ‘special ‘ stamp duty of 3% with a starting rate of zero and this will be in addition to the residential tax duty rates which apply for properties above £125,000.

Also, from April 2017 Mortgage Interest Relief is also being overhauled. The changes are being

phased in, but by 2020 all mortgage interest on ‘Buy to Let’ mortgages will no longer be able to be

deducted from the rental income received, for tax purposes. This is especially significant for Higher Rate Tax payers with tax relief set at a maximum of 20 per cent.

Whilst many clients will still perceive property as a safer investment than that of an investment

ISA or pension, for example, it is important, however, to consider these new tax changes when

you are planning retirement and discussing your tax issues with your Independent Financial

Advisor.