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How to ensure your buy-to-let still makes a profit

Pursuing property profits has become harder but can still boost your income
How to ensure your buy-to-let still makes a profit
  • Investing in buy-to-let property is not as tax efficient as it used to be
  • But there are still ways to reduce the amount of tax and expenses you incur when you do this
  • If you pick the right area and property buy-to-let can still be a profitable investment

Investing in property comes with its own particular challenges, and its attraction has diminished over recent years following changes to tax relief and regulations. The pandemic’s impact has also dented landlords’ profits with the introduction of emergency protections for tenants, which include a ban on evictions, rent reductions and payment holidays during a series of lockdowns. Landlords may now be clawing back lost income amid uncertainty over what lies ahead for the rental market and the possibility of further coronavirus restrictions.

Tax benefit changes since 2017 have already affected profits, for example, by reducing the amount of mortgage costs which can be offset against rental income. Landlords and second homeowners must also pay a 3 per cent stamp duty surcharge. The government had planned to increase the surcharge to 4 per cent in the Autumn Budget, but no hike has yet been implemented.

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