Buy to let landlords get £6bn in subsidies from the government.
It’s not clear where this figure is from. In any case, the rules on tax relief for landlords have recently changed, so the amount claimed by landlords is likely to change too.
“£6 billion a year is given to buy to let landlords”
Jonathan Bartley, 18 May 2017
The Greens haven’t given us a source for their £6bn figure, but it may be about the tax relief that landlords can claim on their rental income.
Individual landlords don’t have to pay tax on all of the income they get from rent. There are allowances for the cost of running the property - just as self-employed people get tax relief for the cost of running their business.
As much as £14 billion was reportedly claimed in tax relief by landlords in 2012/13, according to a Freedom of Information request to HMRC. About £6 billion of this was relief on ‘financial costs’, including mortgage interest.
But those figures are unlikely to be the same today, because there have been changes to the system in recent years.
In the Summer Budget 2015, the Chancellor announced a series of reforms to landlord tax relief which are now being implemented.
Landlords used to be able to deduct 10% of their rental income from the profit they had to pay tax on, as a ‘wear and tear allowance’. This was abolished in April 2016, although they can still deduct the actual cost of replacing furnishings. And since April 2017, the amount that can be claimed as finance relief (e.g. on mortgage interest) has started to be restricted.
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