How property may be affected by the new tax year

April 4, 2017 by Brendan O'Neill

Property Market

As the new tax year starts on 6th April, property may be affected in a number of ways, whether you are renting, are a homeowner, a landlord or a first time buyer.

Property ISAs will be affected by the new tax year, as the annual allowance increases from the current £15,240 to £20,000. A minimum of £100 is required to start investment with this ISA, and you can save any amount you like, although the returns will be taxed once they exceed the threshold.

The Lifetime ISA will be launching and can be used to save towards retirement or a new home. The government will contribute up to 25% of your savings, although you can save a maximum of £4,000 a year, which means you will receive £1,000 from the government, tax-free.

Landlords may feel the effects of mortgage interest relief being capped. Previously, landlords could claim tax relief on mortgage interest payments at their respective tax rate. However, from the start of the new tax year, the tax relief will be capped at 20%, the basic rate of tax. Higher rate tax payers will be effected by this change the most.

The personal allowance will be increased to £11,500. This is the amount of income which can be received without paying any tax, and applies to all taxable income, including rental income.

There are many incentives and help available to home buyers, which mortgage advisers learn about as part of their CeMAP training.