Buy to let tax rules for 2021

Buy-To-Let Rules For 2021 – A Guide For Landlords!

If you are looking for new tax rules on buy to let tax properties, you are just on the right post. In this post, we will cover the 7 new rules for buy to let tax properties for 2021. This includes the following:

  • Tax Help and buy to let tax Contracts
  • What are Rates in 2021?
  • Changes to Capital Gains on buy to let tax
  • Private Residence Relief is Confined
  • One-off Wealth Tax Recommendations
  • Stamp obligation Holiday Finishing




1. Tax Help and Buy to let Tax Contracts:

Not another one precisely, but rather 2021 is the main entire year where you can’t deduct contract costs from rental payments. All things considered, property managers get a 20 percent tax credit on interest installments.

Property managers used to have the option to counterbalance contract interest installments against rental pay, but in 2015 the public authority declared they’re eliminating this.

In 2017-18 the buy to let tax help you could guarantee diminished to 75 percent. Then, at that point in 2019-20, it was just 25%. Presently it’s gone completely.

The public authority has supplanted this with a 20 percent tax acknowledge, which isn’t as valuable for higher-rate and extra rate taxpayers.

To assist with moderating the new standards, an ever-increasing number of landowners are setting up a restricted organization when purchasing another investment property. This is on the grounds that you’ll be dependent upon Corporation Tax paces of 19%, as opposed to the higher individual personal tax rates.

Research shows that a record 41,700 new purchase to-let restricted organizations were framed in 2020 – that is an increment of 23% from 2019.


We are a Young, Creative, Forward-Thinking, and Tech-Driven Firm of Chartered Accountants In London, with an Entrepreneurial Mindset. Get in touch with your business problems.


2. What are Buy to let Tax Rates in 2021?

The public authority expanded the Capital Gains Tax remittance for 2020-21. It went from £12,000 to £12,300. So in case you’re selling a second property, you will acquire more sans tax.


These rates might change when we enter another tax year, so watch out for declarations and our experts at Accotax will keep you updated.


3. Changes to Capital Gains on Buy to let Tax:

The Capital Gains Tax framework is presently under audit, so there might be a few changes to pay special mind to not long from now.

The Office for Tax Simplification has suggested an update of capital additions tax on property, which incorporates decreasing the capital increases without tax stipend and expanding Capital Gains Tax to be more in accordance with personal tax rates.

While nothing has been reported presently, this could make selling your speculation property more costly later on.


4. Private Residence Relief is Confined:

Under the new principles, this has diminished to nine months. Likewise, the £40,000 of lettings alleviation (which you can guarantee in the event that you lease a property that has been your fundamental home) will just apply to landowners who share an inhabitance with their inhabitants.


5. Buy to let Tax Rates 2021:

So what precisely are the individual personal tax rates and groups for 2020-21? Your own remittance is the sum you can acquire before you begin making good on annual tax. Presently this is £12,500 – no expansion from last year.

The higher rate edge for rental pay expanded last year to £50,000, which is where you begin paying the higher pace of tax (40%) on your benefits. The extra rate (45%) limit stays unaltered at £150,000.


6. One-off Wealth Tax Recommendations:

To assist the country with recuperating the monetary expense of Covid-19, the public authority is thinking about an oddball ‘abundance tax’ as opposed to expanding annual tax or VAT this year.

The Wealth Tax Commission has proposed an extra one percent tax for those with resources over £500,000 or £1 million for wedded couples. Obligations, for example, contracts on a property will not be deductible, however.


Happy with your setup? Let us manage your client. We’ll act as your back office.


7. Stamp obligation Holiday Finishing:

The stamp obligation occasion is because of end on 31 March.

Landowners and second-home purchasers have likewise profited with this suspension, but have still needed to pay the three percent investor stamp obligation overcharge under past rules.

There have been calls to broaden this tax break by a further half year to keep supporting the property market during the pandemic – and MPs are booked to discuss this.

All things considered, new figures from HMRC give a solid image of the current real estate market, with a 31.5 percent expansion in private exchanges in December 2020 contrasted and the earlier year.



This may make any shot at broadening the stamp obligation occasion far-fetched, but look out for any updates in case you’re anticipating purchasing another property this year. We hope this article helped to develop a better understanding of buy to let tax rules for 2021.


Still, have a question? Get in touch with us.

Feeling Lost with Finances?
We're Here to Help!

Tax filings
0 +
Accounts filings
0 +

Request A Callback

Call Now