Section 24 of the Finance (No. 2) Act 2015 also known as clause 24 is a new legislation that will see landlords taxed on their revenues, NOT their profits! The legislation is being staged in per year and landlords will only be able to offset an agreed percentage per year from there rental properties mortgage INTEREST costs against the gross rental income.
A little bit of good news however is that even once we hit year 4 there will still be a mortgage cost credit of 20% applied.
If you are a landlord sat on a rental property in your personal name on an interest only mortgage with a high amount of debt secured against the property or a landlord on the higher tax bracket or will now be pushed into the higher tax bracket you may have almost certainly felt the pain last month following your Tax Return and if you are considering buying more buy to lets to compensate for this you will now need to consider the higher stamp duty rates to pay and lenders applying new stress testing measures when considering finance against buy to let properties.
If these changes affect you seek good experienced tax advice now!