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Readers' forum: Parking problem

02 April 2019
Issue: 4690 / Categories: Forum & Feedback
Restriction on mortgage interest on residential garages.

My client has a substantial portfolio of residential properties that are rented out to tenants under assured shorthold tenancies. Many of these properties are subject to mortgages and increasingly tax relief on the interest is being restricted to the basic rate of tax.

The client has recently purchased a block of 20 garages for about £400 000 and 90% of the purchase price was financed by a mortgage.

I was advised of this at a recent meeting with the client who told me that ‘a mate down the pub’ advised him that the interest restriction – which is obviously a hot topic of conversation among the local property-owning classes – will not apply ‘unless I start letting people live in them rather than park their cars in them’.

This is the first time I’ve dealt with such a situation and while I can see a certain logic here I am...

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