Landlords should swot up on tax breaks

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by Gill Montia

Buy-to-let specialist, Paragon Mortgages, is reminding landlords to make the most of their tax breaks.

Some of the costs of letting a property can be offset against rental income and Paragon is aware that many landlords are not making full tax claims.

Recent research from the lender shows that 56.4% of investment landlords had improved the insulation of properties they owned since purchase but 86% were not aware of a £1,500 tax allowance for improving the energy performance of a rental property.

Landlords can also deduct mortgage interest, insurance premiums, council tax, water rates, service charges and even transport costs, for tax purposes.

According to Paragon’s managing director, John Heron, tax matters for landlords are complex and those new to the sector need to ensure they are well advised.

He points out that tax savings can offset the higher mortgage costs faced by many landlords.

While the market is continuing to rise, many amateur landlords are nevertheless facing income shortfalls because of higher mortgage costs.

Paragon has recently launched an online interactive Tax Guide, which can be downloaded from its website.