A UK investigative website that specialises in exposing tax loopholes used by the wealthier echelons of society believes buy-to-let landlords are avoiding up to £2 billion of tax each year by swapping mortgage loans from their own homes to those they are letting out to tenants.
Exaro claim that the tax bonus enjoyed by buy-to-let investors is roughly the same amount the Government intends to whittle away from Housing Benefit claimants and accuse millionaire property owners of using the tax loophole to avoid paying taxes. Their claims are supported by campaign group Priced Out whose spokesman said property investors are pushing first time buyers to one side when it comes to buying residential homes and are probably pushing up house prices, explaining “Buy-to-let investors are competing with first time buyers for the same properties and have more buying power. It would be remarkable if buy-to-let has not had an upward or supporting pressure on house prices.”
It is certainly true that buy-to-let mortgages now account for 1 in 5 arranged mortgages in the UK today when just five years ago they accounted for just 1 in 25. Property investors should have no qualms about giving landlord insurance providers more business in the future as a spokesman for Her Majesty’s Revenue and Customs said they had no intentions of stopping property investors claiming their rightful tax allowances, asserting “There is no such thing as a buy-to-let tax break; it is simply a business cost which is a claim against tax the same as any other business.”
It is a statement that most landlords would agree with, after all not many can claim to be in the millionaire bracket and the great majority of landlords in the UK own no more than three properties.