A common tax myth about landlords

A tax myth that I have heard more than once has to do with landlords somehow price-gouging because they have a debt free property.

Most recently it was written in the Independent where it was stated by Aideen Hayden of Threshold accused landlords¬†of ‘downright extortion’ because they have increased rents at a time when they have no mortgage on the property.

This is a logical fallacy, and a one worth debunking.

For a start, everybody has the right to charge prices and equally the state has a right to tax profits from various activities. In the case of landlords they have to make a tax return stating their profits and the more they make the more tax they pay.

In fact, the effective rate of tax on a landlords net profits is often about 65% or more. Don’t believe me? Play with this excel calculator and see for yourself. If you want to see how it works for a person who is mortgage …

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