Over the past 10 years, the UK government has consistently introduced tax measures that have steadily reduced the profitability of buy-to-let property investing.
The latest change is a 2 per cent increase in the rates of income tax that apply to property income, due to take effect from April this year.
That raises an increasingly pressing question: is buy-to-let still worth the headache?
Let’s recap some of the more recent changes:
Mortgage interest relief
Introduced in 2015 and phased in between 2017 and 2020, this is widely regarded as one of the most damaging changes for individual landlords.
Previously, landlords could deduct 100 per cent of their mortgage interest from rental income before paying tax. Now, they receive only a 20 per cent tax credit on mortgage interest. Why does this matter?
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