How New Property Tax Laws Effect Landlords

One of my Landlords with a rental property in Tooting recently asked what were my thoughts regarding new tax changes for residential property. For anyone uncertain of these changes, let me explain!-

The Government are restricting the amount of income tax relief Landlords receive on residential property. Landlords will no longer be able to receive tax relief on financial costs (such as mortgage interest). This change is being bought into effect gradually over the next four years –

2017-2018               75% of finance costs can be deducted from property income (previously this was 100%)

2018-2019               50% of finance costs can be deducted from property income

2019-2020               25% of finance costs can be deducted from property income

2020-2021               No deductions of finance costs can be made from property income

This would mean on an average one bedroom flat in Brixton, with a rental income of £1,400.00pcm/ £16,800.00pa and an ‘interest only’ mortgage with monthly payments of £450.00pcm/£5,400.00pa, – Year one (2017-2018), the Landlord would receive tax relief on 75% of the mortgage interest (equating to £4,050.00), leaving them to pay tax on the remaining £12,750.00 of the rental income. For a normal rate tax payer at 20% this would be £2550.00 for the year. It would be prudent to speak to an accountant, as there may be other costs which could be deducted from the rental income before tax.

So, what are my thoughts? Well if a Landlord doesn’t incur financial costs on their rental property this will not affect them. For Landlords with a portfolio of properties, some accountants suggest it could be more beneficial to run as a company, where such costs would be company costs, thought, with this model there are other tax changes to consider. I’ve adopted the thought that becoming a Landlord is a ‘decision’, and when making such a decision, costs must be considered. However there will also be an income generated – even if that income is just paying off the mortgage- it’s still an income, and with an income comes tax.

Until now having tax relief was a bonus that many of us have come to take for granted. Ultimately your rental property is your business, it will earn you money. Keep your property in good condition and keep up to date with legislation- even better, as many Landlords do, have Revere take care of all your property needs whether it be letting or selling.

Maybe its time to flick through a property magazine to get some ideas for your next property venture.

We’re happy to discuss any of your property queries, contact myself of Bruno.

Melissa De-Vall, Revere Property Limited, 020 7223 3922

Property Improvements

Offering our fully managed service we are here to help with everyday management duties, for example when Tenants experience a broken washing machine we arrange for it to be fixed, in between Tenancies we are here to arrange cleaning or maybe forwarding post, though outside of this we are much more we can organise a light bulb change- right through to a full refurbishment and everything between. Currently my task is windows, a Landlord has asked me, as her newly appointed managing agent, to have the windows in her Brixton terrace replaced. The windows are literally screeching out to be upgraded. After weathering, repainting, filling, even secondary glazing, time has come for an upgrade.


Windows can add value to a property, though, some windows can make a property look worse and therefore decrease its value, for example if a modern design window was used for pre 1930’s build it may not be in keeping with the original building design and look out of place.   Windows are now not just to let daylight in (heard of the saying ‘daylight robbery’ – well that’s another story for another time), they offer so much more, improving security, helping with sound proofing, combating heat loss and improving energy ratings. You may be considering selling a property, with new windows your property can become the most appealing property to buyers faced with a long list of properties needing upgrading, or as a Landlord, a property with new windows is becoming more important to Tenants and can improve your Tenants’ quality of living. As reported by ‘this is money’ good quality double glazing can improve a property’s value by 10%, this could be up to £60,000 going by the average property price in London, which from Rightmove’s reports this currently runs at £592,000.


Materials for frames include timber, vinyl and aluminium and some offer different features such as ‘double hung’ for opening from the top and the bottom, and tilting inwards to help cleaning from inside. Before changing your windows you must check with your local building department for any restrictions and make sure you are meeting current energy regulations, as well as up to date fire and escape requirements. Choose a ‘FENSA’ registered company with a list of customers’ windows you can visit. On fitting they supply you with a document ‘L’ certificate this is especially important if selling the property.


Im off to our local showroom now to choose some windows. For any advise on getting your property ready for selling or letting don’t hesitate to contact me or Bruno.


Melissa De-Vall, Revere Property Limited, 020 7223 3922,