PARLIAMENTARY WRITTEN QUESTION
Mortgages: Tax Allowances (29 November 2021)

To ask the Chancellor of the Exchequer, pursuant to his Answer of 2 November 2021 to Question 64692, on Mortgages: Tax Allowances, on what basis his Department has concluded that one in 10 landlords are affected by the decision to restrict tax relief on mortgage interest to the basic rate of income tax.

Asked by:
Kevin Hollinrake (Conservative)

The original estimate that 1 in 5 landlords would be affected by the decision to restrict finance cost relief to the basic rate of tax was a forecast based on limited information. The latest estimate of 1 in 10 is based upon received self-assessment tax returns for the tax year 2017-18, the first year after the restriction was brought into force. The statistic refers to individual UK landlords of residential property who completed the main self-assessment property return. It does not include corporate landlords, members of partnerships with property income, landlords of property abroad, landlords who completed the SA200 short self-assessment return, or owners of Furnished Holiday Lettings.

For tax year 2017-18, of all individuals that had declared property income via their self-assessment tax return, around 11 per cent, or approximately 1 in 10, paid more income tax as a result of the decision to restrict tax relief on mortgage interest to the basic rate of income tax.

Answered by:
Lucy Frazer (Conservative)
7 December 2021