The exemption of residential property from the new Capital Gains Tax cuts is top of the list of concerns expressed by professional landlords for the health of the sector over the next 12 months, according to new research by Amicus Property Finance.

63% of landlords cited the Chancellor’s decision to maintain existing CGT rates on residential property sales while reducing them by 8% on assets, as their biggest challenge. In second place (61%) is the abolition of tax relief on mortgage interest, which means that landlords will no longer be able to claim tax reliefs worth 40% or 45% of the interest payments on their buy-to-let mortgages. Instead, the maximum tax relief will be set at 20%, although the change will be introduced over a four-year period.

This was followed by the tax changes to maintenance and improvements (57%), whereby landlords will only be able to claim for ‘wear and tear’ costs actually incurred on replacing furnishings when calculating taxable profits. Increasing costs being passed on from the Right to Rent legislation (53%) and rising legal and accountancy fees (52%) were in fourth and fifth places respectively.

44% of landlords expressed concern about the impact of Brexit, while 34% are worried about accessing long term finance to grow their portfolios.

John Jenkins, CEO of Amicus, said: “The tax landscape has become a lot more hostile for landlords and it’s no surprise that this dominates their list of concerns for the year ahead. In contrast, the prospect of interest rate rises, the threat of falling property prices and difficulties in accessing long term finance are less likely to be keeping landlords awake at night.

“Despite the new tax changes, we are seeing a sustained and growing appetite for property finance driven by the inability of some lenders to act sufficiently quickly to respond to demand. We’re anticipating a strong 12 months for the professional buy-to-let market.”