How much mortgage interest relief impacts landlord tax is a postcode lottery with those in London and the South and East paying more than the rest.
Worst hit is the South East, where experts have crunched the numbers to reveal buy to let and shared house owners will have to fork out an extra £1,624 to HMRC – an increase of 36%.
Landlords in London and the East of England are not far behind – paying an extra £897 (10%) in the capital and £942 – a 22% rise – in the East.
Paying the least are landlords in the North East, where average tax bills will go up by 9% or £241.
Across the UK, the average extra tax payment works out at £897, equivalent to a 10% tax increase.
What the figures reveal is many landlords with one or two letting properties will have to bite the bullet and pay the cash to HMRC because the cost of taking tax advice and restructuring their businesses will come to far more than the extra they must hand over.
The figures were worked out by financial experts at Direct Line Insurance.
How landlord income tax will change
|Region||Total tax paid, 2016-17 (salary and rental income)||Total tax paid, 2017-18 (salary and rental income)||Change in total tax paid, 2016-17 vs 2017-18||Percentage change in total tax paid|
|East of England||£4,200||£5,142||£942||22%|
|Yorkshire and The Humber||£2,796||£3,139||£343||12%|
Source: Direct Line