Buy-to let landlords have been hit with reductions to the tax reliefs available including mortgage interest. It was announced in the budget that the government will restrict the amount of income tax relief landlords can claim on residential property mortgage and other finance costs.
This means that landlords will no longer be able to deduct all their finance costs from their property income, they will instead be restricted to the basic rate.
This measure will be introduced gradually from 6 April 2017.
Landlords operating through limited companies, or who specialise in commercial property or furnished holiday lets will not be caught by these rules.
Other changes announced include the replacement of the Wear and Tear Allowance with a new relief that allows residential landlords to deduct the actual costs of replacing furnishings.