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Tax change could see one in five landlords out of business

Cuts to tax breaks currently offered to landlords are likely to see a large number forced out of the market in coming years.

The tax changes, which were announced last summer, were decided without a consultation process and will come in starting from 2017. They are highly complicated and are likely to affect hundreds of thousands of landlords. Many are still unaware of whether they will be impacted, or how badly. However, higher-rate taxpayers who own properties with a buy-to-let mortgage are almost certain to be substantially worse off. Many basic-rate taxpayers will be hit too, since the loss of tax breaks will push them into the higher-rate bracket.

One agency specialising in the rental sector suggests that up to 20 per cent of landlords might be pushed out of business by the changes, which will be fully implemented by 2020. Idiosyncrasies in the changes mean that some landlords will see the tax they pay double, and some will end up paying more than 100 per cent on their profits. The result is that many will end up losing money and will therefore have to either raise rents, making the property less attractive to tenants, or sell.

The tax changes are just one of a number of serious issues facing buy-to-let landlords. New laws designed to force landlords to check tenants' immigration status are adding an administrative cost to the burden, and rent arrears cost landlords around £10 billion annually. A further £4.5 billion is lost due to damage of rental properties, an average of £6,600 per landlord, every year.

There is little doubt that the landscape for buy-to-let landlords is getting tougher. Those experiencing problems or uncertain about how the changes will affect them should seek the help of a solicitor who specialises in property law and can help them negotiate the difficulties involved successfully.

Are you a landlord who has been affected by the tax change? Talk to us. We are experienced property law specialists and can give you the expert advice you need. Call 01302 320621 or email

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