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Portfolio landlords burying their heads in the sand over tax changes, says expert

A self-employed mortgage expert has claimed that Britain’s portfolio landlords are ‘burying their heads in the sand’ over new tax changes coming into effect in less than 12 months and must do more to prepare now.

Gary Das, who specialises in helping business owners and the self-employed secure finance to purchase property, is founder of Chelmsford-based mortgage brokers Active Mortgage. He fears millions of UK landlords with multiple properties are refusing to see what’s right in front of them in terms of the upcoming tax changes.

He insisted that millions of landlords who own more than four properties with a mortgage must prepare now in order to successfully navigate the changes, leaning on the advice of a mortgage professional for their future strategy.

The changes to mortgage interest tax relief, which have been steadily brought in since April 2017, will come into full effect in April 2020. In addition to changes to landlord wear and tear allowances, they will see the removal of tax relief on interest-only mortgage payments and will mean that portfolio landlords in the higher tax bracket could face bigger tax demands from the Treasury.

Das, author of The Self Employed Mortgage Guide and host of the popular Mortgage Pro Podcast, said: “I fear there are quite a few landlords out there who are burying their heads in the sand or really don't know what is coming next year. The clock is ticking and April 2020 will be here before you know it.  If you are invested in properties you must get organised and seek professional advice from tax and mortgage experts.”

Das suggests portfolio landlords should consider talking to their mortgage professional about their options to secure their future property strategy.

 “Each situation is individual, but at Active we’re advising many portfolio landlord clients who are opting to refinance their properties with portfolio mortgages, or buying or moving their properties into a SPV (Special Purpose Vehicle),” Das said.

 “I am a mortgage advisor, so I can only advise on the mortgage side of things, but landlords should also seek expert advice from a tax professional in order to decide the best strategy for them. Please also remember: your home may be repossessed if you do not keep up payments on your mortgage.”

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