Luckily they have got a long way to go before I need to buy them a house! We did say that when they go to Uni (hopefully they will go), we may look at getting a student let for the duration that they are there, and they can then stay in it, while their friends pay us rent.
edit: Sounds like you did get a bum deal!
I got my first mortgage over 20 years ago! I am showing my age now!
-- Edited by Amanda on Monday 24th of September 2012 05:30:57 PM
-- Edited by Amanda on Monday 24th of September 2012 05:31:23 PM
I am in the throws of finishing of my books for 11-12, this is early for me as I normally do it in January!
I need it for a mortgage application hence its being done early. We brought a house in Feb to rent out (my pension fund), what I am not sure is what I can claim on my SA and what I can't? I have a spreadsheet of expenses, like new patio doors, the old ones didn't lock, shower repaired and a few more things. Now I was only going to claim 50% as hubby is the other 50%. We have no income as the tennant didn't go into the house until mid April.
We also had a rewire as needed test certifcate for letting out, also cleaning of oven. Can we claim the insurance, I am assuming so?
What about any of the solicitors costs and survey fee? I am thinking possibly not on those, but really need advise on whether I can or can't?
Property letting is a complex subject for taxation. I do this for several professional property investors and there are many things to consider, mainly the split capital/revenue is not always easy.
However, if this is your first rental property then your rental business does not officially start until the first day that the property is let (April in your case). You should keep a record of all the expenses as you will be able to claim them next year as pre-trading expenses.
Hope this helps.
Fabs xx
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Yes this is ou first rental property, so what you are saying if I don't need to worry about the pre-trading costs for my tax this year 2011-12. Just keep hold of them for next year 2012-13?
If this is the case it makes my SA alot easier to do this year! I don't do anyone elses SA only my own so I wanted to be sure what I was entering was correct.
Yes, I believe you have nothing to put on the Property pages of your SA for 2011-2012 if the property was not let in that year. Everything will be included in your 2012-2013 SA as pre-trading expenses. However, in my experience, you should not expect big deductions from your rental income next year as many expenses connected with the purchase and refurb of a rental property tend to be capital and not revenue, meaning that you will get the relief against your capital gain tax bill when you eventually sell the property (which can be years from now, especially if this is a property portfolio that you are building as an alternative to a pension).
Best of luck with your investments.
Fabs
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Sounds as though all of the expenditure was down to bringing the property into a condition fit to be let so all of it is repairs rather than improvements so even the patio doors which could be considered capital expenditure is really a repair so expense.
Loan interest is an allowable expense on a mortgage taken out specifically to purchase the rental property. If you purchased it cash but still have a mortgage on your main property contact me off line to continue this chat.
Assuming that it is let furnished then don't forget to calculate the wear and tear as rental income minus council tax and water rates (if you pay those for the tenant) * 10%
The insurance is claimable (standard accruals basis)
Legal Fee's, agents fee's etc. relating to the rental agreement are allowable but the solicitors costs and survey fee's for the purchase would not be as they relate to the capital expenditure so would be taken into account when calculating the profit when / if you sell the property.
HTH,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
If you are planning to build a portfolio as an alternative to a pension then you may want to research taxation of property investments a bit further. I spent a lot of time researching this before launching my services aimed at property investors and I eventually found that the Tax Cafe guides are a brilliant summary. They are good enough at least as an introduction to the subject.
I hope it is not a problem to post a link here for everyone's reference: http://www.taxcafe.co.uk/property-tax.html
Fabs
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~Thanks Fabs will have a look at that. We are possibly going to buy another one next year, and then hopefully expand on it later. Its no good having it in the bank its doesn't earn anything.
It's a good time to buy if you have the money Amanda. My mum didn't go for a pension but bought property instead. If I could afford it I'd do the same. With fewer people being able to get a mortgage more and more people are turning to renting, so it really is a great time.
YEs brief look, trying to finish off my SA for my new mortgage on my residential house. Looks very good and professional, I will chase my clients for the testamonials. I'll email back tonight.
My pensions are frozen and hubbys are worthless, despite him paying in quite alot, so we have decided to do it in property. You are right, I was shocked at what people pay for rent, its more than my mortgage! To start with when we started looking I was thinking surely people won't pay £900 (small 3 bed), but they actually do, and its because they just can't get on the ladder. Dread to think what it will be like when my kids actually fly the nest. After all they are not staying at home forever when they are older!
Hope you've got a big house to put them all in Neil. Your right though people can't afford a deposit while they are renting so I suppose only option is to go back home although not always ideal.
Long gone are the days when people could get 100% mortgages, although even if you could get them I wouldn't recommend them its just asking for trouble!
Stick them in one of your properties then, Amanda. Thats actually what my mum did with my sister. I was lucky enough to get my first house about 5 years ago while mortgages were still relatively easy to come by. My sister tried slightly later and couldn't get one. My mum had a few properties and offered her one, she pays rent at the same rate as the mortgage with the understanding that when the market picks up and if she can get a mortgage she can buy my mum out at the cost price.
Actually typing that makes me realise what a good deal she got, and what a poor one I have.
