New research has shown that over 60% of private sector landlords face being pushed from the basic to higher rates of income tax as a result of Government reforms.

In his Summer Budget, the Chancellor announced that from 2020, mortgage interest relief for residential landlords will be restricted to the basic rate of income tax.

Whilst landlords paying the basic rate might feel unaffected by the change, because tax will instead be applied to turnover, rather than profit, many are likely to find themselves pushed into the higher rates of income tax, despite their income not having increased. This has now been confirmed by new research by the Residential Landlords Association (RLA).

In a survey of almost 1,200 landlords, of those currently paying the basic rate of income tax, over 60% said that the changes announced by the Government would push them into either the higher or additional rate of tax.

RLA policy director, David Smith, said: “The findings of our survey are deeply concerning. Many landlords currently paying the basic rate of income tax face the prospect of a nasty surprise when they meet with their accountants. Having felt that they were not affected by the Budget measures many will seriously consider whether it is worth continuing in the market when faced with this tax bombshell.”