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Landlords failing to take advantage of tax breaks

Tuesday, 14 June 2011 1:32 PM

Landlords are failing to take advantage of tax breaks open to them, according to new research issued today.

Research from buy-to-let mortgage specialist Paragon found that many landlords fail to offset the costs incurred through letting property against the tax they pay on their income, as they are entitled to do.

It said its research showed 13 per cent of landlords are not claiming for mortgage interest, despite it being a major cost.

In addition, a third of landlords don't claim management or letting agent fees, with 55 per cent not claiming for advertising costs incurred through letting their property.

Just 66 per cent of landlords claimed for wear and tear costs to their properties, 41 per cent for energy efficiency improvements and only 49 per cent claimed for the transport costs incurred when visiting their properties.

Nigel Terrington, chief executive of Paragon, said: "Good tax planning is key. How landlords implement, manage and run their tax affairs could have a major impact on landlords' property investments and their overall performance.

"Tax is a complex area and we are confident that our Tax Guide will help landlords obtain 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."

To view Paragon's tax guide, click here.

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