Landlords urged to take action now as new tax costs loom
Property investors and landlords in the province should act now to minimise the impact of higher stamp duty charges, it's been claimed.
Buy-to-let landlords will be hit with new costs from this April when a controversial extra 3% stamp duty charge will be introduced. And from April next year, landlords face being taxed on rental income before mortgage interest payments are deducted and before they can gain a tax credit for the interest.
And accountancy firm RSM said that the prospect of the changes was already dampening the buy-to-let sector.
The firm is holding a seminar next month to advise on the changes and how their impact can be minimised.
Michael Blair, tax partner at RSM Northern Ireland, explained: "It is vitally important that landlords clearly understand the changes and that they could end up making a loss, or at least much less of a return - however large or small their portfolio."
He said landlords could take measures such as setting up property partnerships or transferring larger portfolios to limited companies to diminish the impact.
RSM said there was evidence that confidence was already lagging in the buy-to-let sector as the changes loom.
RSM said figures from the Northern Ireland Housing Executive also pointed to a fall in the sector.
There were 11,500 rental agreements in the private rented sector in Northern Ireland during the first half of last year, which was down 5% on the first half of 2014, RSM said.