PPP Founder, Steve Bolton, comments on the proposed tax changes for landlords

The Summer Budget announcements on tax changes for landlords cannot have failed to raise concerns and questions among UK property investors.

Despite many anticipating that rent controls and longer tenancy agreements were the biggest threats, these failed to get a mention.

However, landlords are now trying to establish how changes to mortgage interest tax relief, wear and tear allowance, Corporation and Dividend tax might affect them.

In an exclusive interview with Vanessa Warwick of Property Tribes, Founder and Chairman of Platinum Property Partners, Steve Bolton gives his thoughts

You can join in the conversation on Property Tribes here

rather than after. - Wear and tear allowance will no longer be 10% of income (less rates and tenant associated costs). It will be based on actual replacement costs. - See more at:

So what are the proposed changes?

- Tax relief of buy-to-let finance costs will be restricted to the basic rate of tax, currently 20%.

- Property profit will be redefined as before finance costs rather than after.

- Wear and tear allowance will no longer be 10% of income (less rates and tenant associated costs). It will be based on actual replacement costs.

For landlords who utilise a Limited Company to run their buy-to-let businesses, the following will also have an impact:

- Corporation tax will be reduced in two stages, reaching 18% from 2020.

- The calculation of Dividend tax is changing from 2016 which means individuals no longer get a Dividend Tax Credit. They will receive a tax-free Dividend allowance of £5,000 but Dividends over this amount will be taxed at various rates depending on the individual's tax banding.

The situation now is that while the petition continues to gather momentum (it is open until January, sign uphere), the proposals are being debated in the House of Commons as part of the Finance Bill. This Bill will be looked at by a Public Bill Committee - a group of MPs who go through a draft law in detail and debate it. You can send your views to the Public Bill Committee here.

These changes are undoubtedly unfavourable towards landlords and many smaller property investors, such as those who are hoping to boost their pension provision, will find that their buy-to-let portfolios are much less viable for them. Having said that, how the Summer Budget announcements affects landlords will depend on their individual circumstances and goals.

This fact, coupled with the undeniable truth that the private rented sector provides much needed accommodation to a growing population of renters, is troubling. And, that the Government just randomly announced these changes without any consultation is the most shocking element.

It is now time for professional bodies, organisations, think tanks and media to come together to evaluate the full detail of the Finance Bill and highlight the real and negative impact it could have on landlords, the property market as a whole, and of course, tenants.

We are preparing a manifesto of how we intend to fight this on behalf of all buy-to-let landlords and in particular, those who provide quality rented accommodation for young professionals.

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