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Buy to Let Mortgage Interest Tax Relief Explained (BTL VS B2SA)




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The UK government implemented a new change in 2020, replacing the finance costs restriction with a tax credit on mortgage interest payments.

Before 2017, you could deduct finance costs like mortgage interest from your rental income. In 2017, HMRC began phasing out the finance costs you could deduct over four years, while also introducing a new relief known as “tax credit.”

Landlords can no longer deduct any of the mortgage interest from their rental income when calculating their taxable profit, thanks to tax credits that went into effect in April 2020. Instead, landlords get a 20% tax break on their mortgage interest payments.

But how does it work for the buy to let and buy to serviced accommodation strategy? Let’s find out. 

So, before you know the way Buy To Let Mortgage Tax Relief can affect landlords, understand how BTL and B2SA work. Then we will talk further about the taxes.


At its most basic level, serviced accommodation is similar to buy-to-let in that the raw product or type of property that we could use is similar (if not identical) to a buy-to-let.

The main distinction between the two is that serviced accommodation is rented on a short-term basis, similar to a vacation rental (except that not all guests will stay in the property for vacation purposes), whereas a buy to let typically involves a 6 or 12-month Assured Shorthold Tenancy.

How do Buy-To-Let Work?

There are a few differences between Buy To Let Mortgage Tax Relief and traditional mortgages. One of them is that the fees are usually much higher. Moreover, a deposit of 25% of the property’s value is a requirement for a buy-to-let mortgage (although this can range from 20 percent to 40 percent).

How does Buy-To-Let Tax Work?

With the changed Buy To Let Mortgage Tax Relief, CGT on buy-to-let second properties is charged at 18% if you’re a basic rate taxpayer. It goes at 28% if you’re a higher or additional rate taxpayer. CGT on other assets is calculated at a basic rate of 10% and a higher rate of 20%.

If you make a profit on your buy-to-let property, you will usually have to pay CGT if your gain exceeds the annual threshold of £12,300. (For the 2021-22 tax year). Couples who own assets together can combine this allowance, potentially allowing a gain of £24,600 in the current tax year (2021-22).

How does B2SA Work?

If you’re going to remain in serviced accommodation investment strategy, one thing you should keep in mind is that you’ll need to plan. It is because this type of property would not be considered a normal residential property under one of the Planning Acts. It’s essentially a vacation rental. That’s pretty much how they’re going to handle it in terms of planning.

As a result, you’ll require planning permission. It will impact other factors, such as how you finance the property.

You’ll need to figure out how you’ll pay for a serviced apartment if you want to buy one. And if you don’t have enough cash to buy the house outright, you’ll almost certainly need a mortgage to cover the costs. The characteristics of the property will determine the amount of money you can borrow.

Also, lenders may be willing to lend up to 80% of the property’s value if you can release the apartment from the management agreement within six months and use it as a permanent residence.

How does the tax work for B2SA?

Although Section 24 stated that mortgage interest could not be deducted, this does not apply to serviced apartments. As a result, you won’t be able to deduct your mortgage if you rent out the property for short stays, which is fantastic! This is why, to save money on taxes, many landlords have converted their buy-to-let properties or HMOs to SA.

However, purchasing a new boiler for your home, or anything else for that matter, is completely tax-deductible as long as you’re renewing, repairing, or replacing it.

Bottom line 

So, if you take a closer look at this guide, you will probably see that Mortgage interest tax relief is also helping with the new opportunities for investors to get into the SA business. However, you can always refer to professional experts in case you need more guidance about the Mortgage interest tax deduction UK 2021.

Remember that laws are always changing and there is always a new opportunity and a new direction to go on. But you don’t want to lose your way. So, if you have an expert with a detailed understanding of both Buy To Let Mortgage Tax Relief and serviced accommodation tax relief, you must consult them before taking any further steps.
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Unveiling the Secrets of Deep Cleaning Success




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Introduction: In the pursuit of a pristine and hygienic living or working space, the importance of deep cleaning cannot be overstated. Shafaf Cleaning emerges as a beacon of excellence, unraveling the secrets to a successful deep cleaning experience. Let’s delve into the transformative journey of achieving unparalleled cleanliness through the lens of Shafaf Cleaning.

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Shafaf Cleaning understands that a comprehensive approach is key to deep cleaning success. Offering a range of packages that cover every nook and cranny, from carpets to ceilings, Shafaf ensures that every inch of the space is rejuvenated. This holistic approach guarantees a thorough and transformative cleaning experience.


In the realm of deep cleaning, Shafaf Cleaning services stands as a testament to success through a blend of precision, technology, professionalism, and environmental consciousness. By unveiling the secrets of deep cleaning success, Shafaf Cleaning continues to redefine the standards of cleanliness, turning each cleaning endeavor into a journey toward a healthier and happier living space.

This article was written on theodysseynews.

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