3 ways the new tax year has changed property
The new tax year has arrived and if you have an interest in the housing market, it’s definitely worth looking at how the New Year changes things.
1. More chance to be eligible for a Shared Ownership scheme
Some changes started before the new tax year got underway. From April 1st for example, Shared Ownership – where you can purchase between a 25% and 75% share of a property from your local housing association has become accessible to more people.
2. You can earn more without being taxed from renting your spare room
The beginning of the new tax year brings with it some positive news if you’re a landlord with a lodger as oppose to a tenant. Thanks to the Gov’s Rent a Room scheme, you have the ability to bring in £7,500 a year in rent before incurring a tax. The cap had formerly been immobilized since 1997 when the scheme started at £4250.
3. Increase on tax relief on the interest earned on money saved for deposit
Saving for a deposit is not easy in today’s property market, particularly in the areas where house prices are rapidly increasing. The easiest way to counter this is to avoid paying tax on your interest earned.
The newest personal savings allowance which began on 6 April, happily, makes this job simpler than in the past. As of now people paying the basic rate on taxes can earn £1,000 in savings interest before tax is charged and people in the higher tax bracket will be able to earn up to £500.
The beginning of the 2016/2017 tax year also brings a unique new tax free ISA limitation. Although does stay freezed at £15,240.
Bear in mind also that you can currently select between paying into the government’s help to buy ISA and paying into a regular ISA. Read about the advantages and disadvantages of the account here.
If you aged under 40 by April 2017, the newest Lifetime ISA scheduled to start subsequently is definitely something worth looking at. It’s a tax-free savings account perfect for those saving up for a deposit, as you can store up to £4,000 a year and then receive an additional £1,000 boost from the Government.