Landlords urged to make the most of tax breaks

Buy-to-let mortgage specialist Paragon Mortgages is urging landlords to ensure that they are taking advantage of their taxable allowances.

Landlords can offset many of the costs incurred through letting property against their income, but many landlords are unaware of the full range of costs they can claim.

For example, Paragon research reveals that 86% of landlords are unaware of a £1,500 allowance when improving the energy performance of a rental property, even though over half (56.4%) have improved the insulation of a rental property since purchase.

To help guide landlords through the tax minefield, Paragon Mortgages has launched an online interactive Tax Guide, which can be downloaded at paragon-mortgages.co.uk/files/taxguide.pdf or by visiting the Literature Library at the paragon-mortgages.co.uk website.

The comprehensive Guide helps landlords from purchase through to sale and provides valuable information on Income Tax, Annual Income Tax Returns, Limited Companies and Capital Gains Tax, in addition to top tax tips and frequently asked questions.

Paragon Mortgages managing director John Heron says: ‘Good tax planning is key. How you implement, manage and run your tax affairs could have a major impact on your property investments and their financial profitability.

‘It's an extremely complex area and we are sure that our Tax Guide will help landlords get a better grasp of tax matters. It's vital that landlords take advantage of the allowances open to them to maximise their return on investment.'

Amongst the costs landlords can deduct from income are:

Mortgage interest
Water rates
Insurance
Service charge, ground rent
Council Tax
Legal fees
Accountancy fees
Repairs and maintenance
Management or Letting Agent fees
Transport costs for visiting the property
Advertising
The Landlord Energy Saving Allowance

Heron adds: ‘I'm sure when landlords take all of these costs into consideration it could generate a significant saving on their tax bill. Landlords shouldn't be ignorant to savings in the current market.'