The Government wants to promote the buy to let market by ensuring the ‘Buy to Let Tax Relief‘ is available for landlords who wish to invest in this kind of property. There are two ways in which landlords can be able to avail of buy to let tax relief. The first is to include rental income on their income tax returns, which will be offset against any other income sources, and the second is to apply a basic rate band on their rent income. This is the landlord’s rate to pay if he was to deduct all his other expenses from his rental income and use that to calculate his buy to let tax relief.
The basic rate band is a complex one, as it will depend on many factors such as the landlord’s age, tax status, and whether he holds an unlimited leasehold or limited leasehold. However, it is a fixed rate, and landlords can help themselves to the best of their ability by ensuring that all of their expenses are included in their annual income, and this will be reflected on their annual tax return.