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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