Paul Georgian Owner

The Buy2Let Shop Limited

The Buy2Let Shop Limited is a property investment company based in London UK and deals with investors at novice/beginner level or advanced property investors. We offer professional services to vendors looking to sell their home to investors looking to build their portfolio.
The Buy2Let Shop Limited South Tower, 26 Elmfield Road Bromley BR1 1WA
020 3837 3300
27 September 2017
27 September 2017,
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In the eyes of the law, if you rent out a property and make an income from it, you’re essentially running a business. This means, like any money-making enterprise, you’ll need to pay certain taxes on your earnings, not to mention on the purchase of the buy-to-let property for sale.

Don’t let this put you off – landlords still generate an excellent ROI whilst paying their taxes. However, it’s important to swot up on your tax responsibilities before you get started, or risk facing a fine (or worse) in the future.

Property Seminar Tips – Tax and Buy-to-Let

In our property investment seminars, we often get asked about tax responsibilities. If you’re thinking of investing in property in the UK and you want to know more about tax; here are a few tips to help you.

  • Register yourself with HMRC. If you’re planning to let a property, you’ll need to notify HMRC. It’s not worth trying to ‘slip beneath the radar’ as HMRC can view all house purchases that take place in the UK via the land registry. You will also need to register for self-assessed tax returns too.

 

  • Be aware of stamp duty tax. Stamp duty tax rates changed in 2016, and are now 3% higher than before. How much you’ll pay depends on how much the property sells for – so the more expensive your buy-to-let property for sale is, the higher the stamp duty tax.

 

  • Capital gains tax. It may seem a long way into the future, but it’s important to note that when you sell your property (or even gift it to a loved one), you’ll have to pay capital gains tax. There are ways you can minimise this cost – for example, if you move into the property and use it as your principle place of residence, some of the gain will be exempt.

 

  • Tax relief. In 2015, the government made significant changes to the tax relief system for higher rate paying landlords, to be phased in by 2020. At the moment, they can claim 40% or 45% tax relief on their mortgage interest on rental houses; but by 2020, this will be reduced to 20%.

 

  • Keep tabs on expenses. Like any business, you can claim expenses, which reduce your tax bill. Obviously, you’ll need to keep records of mortgage payments, insurance and other bills associated with the buy-to-let. But it’s also wise to jot down all other expenses too, such as maintenance costs, marketing costs (e.g. if you advertise the property in the local paper), and even the cost of travelling to the property.

 

The Buy2Let Shop Limited

If you’re considering purchasing a buy-to-let property for sale, but are concerned about tax issues, talk to The Buy2Let Shop. Our team of property investment agents regularly host property seminars in London, designed to enlighten you about the current UK tax system for landlords, plus share a wealth of other relevant information about investing in property in the UK.

To find out more about how we can help you, visit The Buy2Let Shop website today.

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