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In today’s episode of The Serviced Accommodation Podcast, Kevin covers Section 24, the anti-landlord tax. Kevin goes on to share real-life examples of how Section 24 can affect you, your property portfolio and your mortgage interest rate relief. Landlords have effectively had the rug pulled from beneath them and will no longer be able to offset their mortgage interest payment against their rental income, before calculating the tax due.

But here’s the good news, Section 24 does not affect Serviced Accommodation and there’s still time to convert your buy-to-lets into Serviced Accommodation units and continue to offset your finance against your income. Tune in today to hear how.

Look out for another episode of the Serviced Accommodation Podcast where Kevin will be discussing capital allowances and how it affects property investors.

Find your host Kevin on Facebook ‘Property Soldier’ to suggest content for future episodes of The Service Accommodation Podcast.

The mortgage interest rate relief reduction. The amount of mortgage interest an HMO or buy-to-let landlord an investor is able to offset against their rent is being reduced.

KEY TAKEAWAYS

• Section 24 removes landlords' ability to deduct the cost of their mortgage interest from their rental income when they calculate a profit on which to pay tax.
  
  
• The National Landlords Associations has predicted that thousands of landlords will become higher taxpayers as a result of section 24, which is a scary scenario. A lot of buy-to-let landlords won’t know this is coming and will only discover this when they submit their tax returns. As a solution landlords can incorporate as a company, however, this can incur costs such as capital gains tax and likely be even more costly than the additional tax.
  
  
• Section 24 will affect a multitude of things such as child tax credits and student loans as it will push leveraged landlords into even higher tax brackets affecting their income status.
  
  
• It could be considered that professional landlords owning property in a company won’t be affected. However, most professional investors will also own property in their own name and will be affected. The advice has always been to buy property in your own name as it previously was the most tax-efficient approach.

BEST MOMENTS

“There’s no perfect solution to avoiding Section 24.”

“Some landlords are selling up their portfolio or simply increase their rents to absorb the additional costs.”

“The percentage of landlords affected will increase year on year and we will see an increasing impact of Section 24.”

“Section 24 is being phased in over four years. It started in 2016 and will be fully implemented by 2021”

VALUABLE RESOURCES

Mortgage Interest Relief Reduction Calculator

Buy-to-let calculator (DailyTelegraph)

ABOUT THE HOST

Your host Kevin Poneskis enjoys public speaking, travelling, exercising and keeping fit. He also enjoys working with a charity called STOLL which provides accommodation and training for homeless veterans.

Kevin was in the British Army serving 24 years, mostly in a Commando unit and retired at the rank of Regimental Sergeant Major. He left the Army in 2011 and became a full-time property investor. During most of his Army career Kevin was investing in property and has been a property investor now for over 27 years.

CONTACT METHOD

Facebook – Property soldier

Email – [email protected]