The National Landlords Association has sent a letter to Chancellor George Osborne warning against altering the current system, which allows rental income to be offset against mortgage interest payments.
Richard Lambert, the NLA's chief executive, wrote: "It has been suggested that private landlords receive too many perks or reliefs which give them an unfair advantage compared to owner-occupiers, but this ignores the fact that letting residential property for profit is a business.
"Removing their ability to deduct legitimate costs before declaring their taxable profit would essentially force them to suck up one of the most significant expenses they face in being able to provide homes for others.
"I hope you will give an unequivocal reassurance that the government will continue to regard Buy-to-Let mortgage interest payments as a legitimate business cost and give landlords the confidence and certainty to invest for the future."
John Heron, the managing director of buy-to-let lender Paragon Mortgages, agreed that it would have a negative impact on the UK economy should the government meddle with the current system.
He said: "It's an entirely reasonable way for landlords to be treated and it works in the same way as any other business would operate.
"I haven't seen any official source that suggests there might be any changes, but you never know with budgets."
Previously the NLA has warned that if mortgage interest payments were classed as non-deductible landlords would have to raise rents to compensate.
see more: http://www.mortgageintroducer.com/mortgages/253036/5/Industry_in_depth/Landlords_fear_budget_tax_squeeze.htm