After former chancellor George Osborne announced controversial tax changes on buy-to-let properties in last year’s summer budget, he also made another, less headline-worthy announcement that went largely unnoticed. He abolished the right for landlords to have an automatic entitlement to a 10% tax break for wear and tear of their properties. Instead, they are now only allowed to deduct the costs they actually incur from their tax bill.

According to research by the National Landlords Association (NLA), nearly half of all landlords will be affected by the removal of the changes. The findings show that a quarter of landlords (24%) let their properties fully furnished, with 22% letting a mixture of furnished and unfurnished properties. The new changes came into effect in April this year and will cover the cost of replacement furniture, furnishings, appliances and kitchenware provided for tenants including:

• Movable furniture and furnishings
• Televisions
• Fridges/freezers
• Carpets and flooring
• Curtains
• Linen
• Crockery or cutlery

Chris Norris, head of policy at the NLA said, “We fully understand the frustration of those landlords who let exclusively on a furnished basis as the removal of this allowance will very likely represent a reduction in the relief they can claim. However, it will come as a welcome revision for those letting a mixed portfolio, unfurnished or part-furnished property as the replacement system will allow them to deduct legitimate revenue expenses in the future.

“The NLA has broadly welcomed these changes as it should lead to a fairer system for more landlords. However, we will push to make sure that any landlords who’ve made recent investments, with the expectation of offsetting the cost over a number of years using the current allowance, will not be disadvantaged”.