First Complete and Pink are calling for brokers to ensure landlords on their books are speaking with a qualified accountant about the impending changes in mortgage interest tax relief and to urge brokers to raise awareness of the affect these changes will have on landlords in their region.
From April 2017, the government will begin to phase out the higher rate tax relief gradually over a period of four years, meaning that buy-to-let landlords will no longer be able to claim 45% tax relief on their monthly interest payments, but instead will only be able to claim the basic rate of 20%. Adding to this, the Prudential Regulation Authority (PRA) will be revising its underwriting standards for lenders who operate in the buy-to-let market.
First Complete and Pink hosted seven specialist buy-to-let workshops across the UK this month. At the workshops, brokers were given an overview of the new tax regime, discussed a variety of specialist solutions, HMOs and Limited Companies in particular, and lending into retirement. Also discussed were bespoke ICRs.
Toni Smith, sales operations director for First Complete and Pink, said: “The specialist buy-to-let workshops are one of many events that First Complete and Pink runs to support its advisers. Events like these demonstrate our commitment to continually offering a market leading network proposition to brokers in an evolving marketplace.
“Brokers have a vital role to play in flagging the impact of the tax changes to clients, and to point them in the right direction of a qualified accountant. It is equally important that brokers avoid giving further detailed commentary or debate around the topic of tax treatment of BTL portfolios – as this could be constructed as advice and relied on by the client.
“There are challenging times ahead for landlords and they will need all the help and support they can get. Mortgage brokers – as ever – will be a key point of contact as new complexities continue to emerge for landlords.”