Changes in allowances for rental properties
Over the last few years the Chancellor has made some deep cuts into the benefits of a BTL landlords.
- 36 month rule reduced to 18 months effective since April 2015. Only allowable if landlord lived in the property.
- Capital Gains tax payable for overseas landlords on gains in the UK effective since April 2015
- 10% Wear & Tear allowance withdrawn for furnished properties effective from April 2016. You can only claim general wear and tear allowance based on the actual cost of any capital items.
- Interest relief to be capped at the basic rate for the taxpayer. Taper over 4 years from 2017
- Additional stamp duty payable on BTL of 3% on stamp duty rates. Plus lower threshold of £40K , when purchasing own home minimum threshold remains at £125K.
Only piece of good news, Rent a room allowance increased from £4,250 to £7,500 from April 2016.