First Complete and Pink are calling on brokers to make sure that any landlords that they have on their books are talking with a qualified accountant, to ensure they are up to speed with the implications of upcoming tax changes.
From April 2017, the Government will start to phase out the higher rate of tax relief over a period of four years. This means that buy-to-let investors will no longer be able to claim 45% tax relief on their monthly interest payments. Instead, they will only be able to have the basic rate of 20%.
Add to this harsher underwriting standards for landlords and it looks like another tough few months for the buy-to-let market.
First Complete and Pink recently hosted seven buy-to-let workshops, which gave brokers the chance to speak with experts on how the changes will impact on them and their clients.
Brokers were given an overview of the new tax regime and talked about HMOs and limited companies.
More calls for brokers to advise clients on BTL tax changes
Toni Smith, sales operations director for First Complete and Pink, noted: ‘The specialist buy-to-let workshops are one of many events that First Complete and Pink runs to support its advisors. Events like these demonstrate our commitment to continually offering a market leading network proposition to brokers in an evolving marketplace.’
‘Brokers have a vital role to play in flagging the impact of the tax changes to clients, and to point them in the right direction of a qualified accountant. It is equally important that brokers avoid giving further detailed commentary or debate around the topic of tax treatment of BTL portfolios – as this could be constructed as advice and relied on by the client,’ he added.
Concluding, he said: ‘There are challenging times ahead for landlords and they will need all the help and support they can get. Mortgage brokers – as ever – will be a key point of contact as new complexities continue to emerge for landlords.’