Private Rented Housing: Tax Allowances

(asked on 11th July 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an assessment of the potential merits of reviewing buy to let tax relief in the context of the difference in mortgage interest cost for a limited company and a private landlord.


Answered by
Lucy Frazer Portrait
Lucy Frazer
Secretary of State for Culture, Media and Sport
This question was answered on 14th July 2022

Property income for unincorporated landlords is taxed through the Income Tax system and is taxed through the Corporate Tax system for incorporated landlords. The Income Tax and Corporate Tax systems are not directly comparable, as they offer different rates of tax and reliefs, reflecting the different nature of the taxpayers.

From April 2017 to April 2020, the Government phased in a restriction of deductions for finance costs for landlords of residential properties to the equivalent of the basic rate of Income Tax. The restriction makes the tax system fairer by ensuring unincorporated landlords with higher incomes no longer receive the most generous tax treatment. As with all aspects of the tax system, the Government keeps these reliefs under review and will set out any reforms at a future fiscal event.

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