Landlords are among the biggest losers, as the amount of mortgage interest they can offset in their tax bill falls from 75% to 50%.
Many buy-to-let investors have moved properties into a limited company in response to the tax changes, Kent Reliance recently found and warned that those who don’t prepare could be in for a shock.
Support for Mortgage Interest (SMI) is also being withdrawn today and will be replaced by a loan, which will be payable upon the sale of the home.
The change affects around tens of thousands of homeowners and those who don’t sign a new loan agreement could see payments stopped altogether.
But many have not been successfully contacted about their options, which could see some homeowners struggling to make their mortgage repayments, according to Mark Pilling, managing director at Spicerhaart corporate sales.
He said: “With this in mind, lenders need to keep a really close eye on their clients’ ability to keep up their repayments and engage with third parties to look after every borrower’s best interests.”
The winners
An increase to the tax-free personal allowance to £11,850 from April 6 is set to boost the pay packets of workers, as well as pensioners.
It will mean that basic rate taxpayers will pay £1,075 less in income tax than they did in 2010-11, according to the Treasury.
At the same time, the National Living Wage has been raised to £7.83, and the state pension is increasing by 3% to give those of retirement age an extra £180 a year on average.
Graduates will also save up to £360 a year, as the student loan repayment threshold is raised to £25,000.
Chancellor Philip Hammond, said: “From today, millions of people will have more pounds in their pocket and keep more of their hard-earned wages.
“By increasing the National Living Wage, cutting income tax, and freezing fuel duty for the eighth year running, we are boosting living standards for millions of people this April, giving them more choice over how to use their pay packet and building an economy that works for everyone.”
