Buy-to-let landlords will enjoy £16.7bn of tax relief even after the government’s changes are fully phased in by 2020, according to research by estate agent ludlowthompson.
The reliefs on offer to investors are being reduced on a phased basis.
The Treasury has said it expects the amount of tax it collects from property investors to jump by £840m a year by 2020-21.
Data from the government revealed landlords claimed £17.5bn in property expenses last year, with more than £7bn claimed in tax relief on mortgage interest and other financial costs.
Ludlowthompson says that landlords will still be able to claim around £6.4bn on interest rate costs alone even after the changes are fully implemented.
A total of £17.3bn can be claimed in this current tax year according to the firm’s calculations, falling to £17.1bn in 2018/19, £16.9bn in 2019/20 and then £16.7bn in 2020/21.
Ludlowthompson chairman Stephen Ludlow says the tax breaks on offer on buy-to-let purchases “are still very valuable” despite the changes.
He adds: “Those tax breaks are essential to ensure that landlords continue to invest in maintaining their properties.
“If the tax breaks are reduced further then landlords will cut their investment in the properties they own – reducing the standard of UK rental accommodation.”
Ensuring landlords can invest in providing quality homes for tenants should be the priority for policy-makers, according to Ludlow, particularly in areas like London where there is insufficient supply.
He adds: “If cities like London are to remain a magnet for home-grown and international talent, sustaining a vibrant, high quality rental market is essential.
“To do that, the system has to work well for both tenants and landlords.”