Budget Insight from MHA Property & Construction sector
Budget changes likely to lead to rent increases
July 9, 2015
Robert Dowling, Head ofthe Property & Construction Sector at MHA, the national association of accountancy and business advisory firms,says that changes unveiled in the Budget could lead to an increase in residential rental levels.
Tax Relief
"Landlords can currently deduct the full amount of interest on money borrowed to acquire or improve residential investment properties, even though Mortgage Interest Relief was withdrawn from homeowners some time ago.
"The Chancellor's decision to restrict the relief on finance costs that individual landlords of residential property can claim to the basic rate of tax is an attempt to create a level playing field, but is likely to lead to an increase in property rents to compensate for an effective increase in the cost of borrowing.
"This might encourage more buy to let portfolios to be moved into companies, but there would be a tax cost associated with this."
Inheritance Tax
"With regard to government plans to introduce an additional nil-rate Inheritance Tax band, the aim is to take the family home out of inheritance for all but the wealthiest. The new rules are also aimed at assisting those wishing to downsize in their retirement, but watch this space as some of these details are subject to future consultation."
-Ends-
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About MHA
MHA is a fast growing UK wide association of respected and progressive independent accountants and business advisers, all sharing common values and goals.
Each firm is characterised by its strong reputation in its local area for providing accountancy and business advice to entrepreneurial businesses.
By joining together as part of MHA, member firms can offer clients an increased number of specialist accountancy services and expert business advice. As well as benefiting from the in-depth sector knowledge available across the association.
MHA is an independent member of Baker Tilly International.
Baker Tilly International is the world's 8thlargest accountancy and business advisory network by combined fee income of its independent members. Baker Tilly International member firms specialise in providing accountancy and business advisory services to entrepreneurial, growing businesses and mid-market listed corporates worldwide.