Oxford is a city with a high number of buy to let investment properties.

Many of these are owned by portfolio landlords, well versed in navigating their way through the advantages and pitfalls of the buy to let investor market. But, what about those who are about to invest for the first time?

Recent changes in taxation have further complicated the issue. Many would-be investors are unsure if property is still the lucrative investment that it once was.

Here we offer a quick guide, outlining the changes:

Mortgage interest relief will be restricted as follows:

25% for the tax year ending 5^th April 2018 with 75% allowed in full under the old rules

50% for the tax year ending 5^th April 2019 with 50% allowed in full under the old rules

75% for the tax year ending 5^th April 2020 with 25% allowed in full under the old rules

0% from tax year commencing 6^th April 2020.

It will not be possible to deduct any finance costs from April 2020 but a tax credit of 20% of mortgage interest finance can be taken against the liability for the year.

To further clarify the position on Stamp Duty……

Stamp Duty for an investor purchaser at £250,000 would pay an effective rate of 4%.

At £500,000 an investor would pay an effective rate of 6%.

It also used to be possible to deduct 10% of rental profits as wear and tear. This is no longer possible. Instead, with proof of purchase receipts or invoices, it is now possible to deduct actual costs incurred in repair, maintenance or replacement although the cost of initial provision is not allowable under new rules.

It remains possible to offset allowable expenses from rental income. These include letting agent’s fees, insurances, professional fees, service charges and deposit and safety certification charges. For owner occupiers intending to rent out their former homes, it is possible to offset repair and maintenance expenses within a period of seven years prior to the initial letting, if it can be proved that these are for the purpose of preparing to let.