M2RTY
Member
Registered: 25th May 01
User status: Offline
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Any landlords on here?
Bought a new house (should all go through this month) and need to rent my current one out
Worth about 105k, would rent for 500pcm easy
But i dont have a mortgage on it, so would get taxed at 40% on all profit (after expenses of say 100 a month)
I spent 15k cash on the house in the last 4 years, on new roof, windows, basically stripped to a brick shell and rebuilt. Would i be able to offset 5000 quid of the 15k as expenses for 3 years to cancel out my tax bill?
Am i right in thinking after 3 years ive got to pay capital gains tax unless i "live" in it again before selling it?
Would i be better off remortgaging the house and taking 75% of the money out on an interest only buy to let deal? Could then put more money into a 2nd buy to let house and rent them borh out?
Only problem i moght have is gettin the buy to let mortgage as i do IT contract work and most contracts are 2-6 months with gaps inbetween, so no steady income, but i still earn enough, just not 100% gaurenteed
Cheers
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Ecosse Sport
Member
Registered: 5th Jun 02
User status: Offline
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You can only offset costs when the property is actually rented out.
You need to find something to charge against the property to help offset the tax liability.
I'll u2u about something you might want to consider.
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Toby
Premium Member
Registered: 29th Nov 05
User status: Offline
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I rent my house out.
You should be able to use some of that £15k you have spent to offset against income tax, how much of it though im not sure as iirc there is a cut off point, i.e. only offset it against what you spent in that financial year not from previous years.
You have to live it in it for 3 months before you sell it or you will have to pay capital gains tax on it.
I would personally if you had the capital to buy as many as you could now, i.e. rather than buying one outright, buy three if you can be bothered with the leg work. All three should cover the mortgages
No problem with the mortgage re your job, they work off estimated income rental and property value when lending you money.
Most i have seen lent is 75% with The Mortgage Works, bu the fee's are massive and the interest rate is around 5.8%
Around 60% LTV would get you a better rate.
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