Throughout 2016, new buy-to-let legislations were introduced by the British Government. Very often this is a minefield, and particularly for the 'accidental landlord' it is easy to fall foul of legislation.

We have compiled a list of the three big ones to look out for:

Mortgage interest tax relief

Recent changes to mortgage interest tax relief mean, regardless of which tax bracket landlords fall under, they will only be able to claim the basic rate of tax as relief.

What this means:

Landlords who already pay basic rate tax will see no change, but given that the majority find themselves in higher tax brackets, the impact on their income is enormous.

Those landlords who fall into the higher brackets, who could previously claim back 45% of their mortgage interest costs will now only be able to claim back 20%, the same as those in lower tax brackets.

This change will be phased in over a four year period, starting in April of this year.

Stamp duty

It has also been announced that the government will be increasing stamp duty on second homes, including buy-to-let properties.

As of April 2016, landlords have to pay a three percentage points above the previous rates of stamp duty surcharge on buy-to-let homes.

What this means:

If, for example, you bought a second property before 1 April 2016 for £500,000 you would have paid 0% stamp duty on the first £12,000, 2% on the next £125,000 and 5% on the remaining £250,000. Any second property bought after April 2016 will have forced upon it the new rates are 3%, 5% and 8%, effectively doubling the amount of tax on this property.

Wear and Tear

Whereas previously landlords were allowed to deduct an annual allowance of 10% from their taxable profits for wear and tear, regardless of the real world costs, April 2016 also saw the introduction of new rules stating that landlords can only claim for wear and tear costs that have actually been incurred.

What this means:

Put simply, you will be obliged to provide itemised receipts for all repairs if you wish to have the costs deducted from your tax.

Thanks to these new legislations, buy-to-let investments are likely to become much less profitable for landlords who own multiple properties. As a result, landlords need to think carefully about their future business decisions and work out whether buy-to-let is their best investment method moving forward.