Goodbye my lover: Will new tax law end retirees’ affair with the buy to let market?
Whilst many of us dream of a restful, commitment-free retirement, there are an increasing number of retirees who are choosing to spend their twilight years fulfilling in the role of landlord.
According to figures, 14 per cent of tax free pension cash released in 2015 was used to purchase property, with half of these properties intended for the buy to let market. Buying a property is now amongst the top three financial options for retirees.
However with the buy to let market scheduled for significant change from April, could this ‘no brainer’ investment may need much more consideration.
From 6th April 2016, anyone buying a rental property will have to pay an additional 3 per cent Stamp Duty. Higher tax relief on mortgage interest is also set to reduce to the basic 20 per cent rate from April 2017. Landlords will also be limited in making claims for wear and tear.
Lynne McCaffrey, Head of Property, at Goldsmith Williams comments:
“Undoubtedly the forthcoming buy to let changes are likely dissuade many buy to let investors, including retirees or ‘grandlords’ as they are affectionately known.
“However our new company formation service allows you to set up a Limited Company and take advantage of the favourable tax environment for buy to let mortgages.”
Click here for more information about our Buy to Let Company Formation service.