Should private landlords be allowed to deduct their buy-to-let (BTL) mortgage interest as a business expense for tax?
Since 2020 individual private landlords in the UK have been unable to deduct buy-to-let mortgage interest from rental income when calculating taxable profit. Instead they receive a 20% basic-rate tax credit on the interest. Limited companies can still deduct interest in full before corporation tax. The restriction was introduced to level the playing field with owner-occupiers and reduce incentives for leveraged buy-to-let investment. Landlords and industry groups continue to campaign for its reversal, arguing it increases rents and reduces housing supply.
4 Opinions
Tax breaks on investments should be only for productive assets, e.g. factories, not rewarding speculation. We want to grow the economy, not drive up the cost of housing by subsiding buy-to-let.
There should be rules in place to make sure it is reflected in rent prices
Landlord make enough profit as it is, adding further tax breaks is perverse
This is a choice they have made. If they don't like the structure of a decision nobody has forced them to make, they can sell.