ChatterBank3 mins ago
Renting a Property Out
6 Answers
I am thinking of renting a property out but was wondering about the tax implications. I understand I will be taxed on the profit I make. My questions are:
1. Will I be taxed on the gross rent or net rent received?
2. If it is the net ( as I think it would be ) are you allowed to subtract the monthly mortgage payment as an expense? Or it it just repairs, insurances, etc?
For example, if I rented a property out for �500pm and the mortgage I was paying was �400pm - would I be taxed on the �100pm profit or the �500pm rent that I would be in receipt of?
All very confusing and the Goverment websites are not much help.
1. Will I be taxed on the gross rent or net rent received?
2. If it is the net ( as I think it would be ) are you allowed to subtract the monthly mortgage payment as an expense? Or it it just repairs, insurances, etc?
For example, if I rented a property out for �500pm and the mortgage I was paying was �400pm - would I be taxed on the �100pm profit or the �500pm rent that I would be in receipt of?
All very confusing and the Goverment websites are not much help.
Answers
Best Answer
No best answer has yet been selected by FieryP125. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.Well miss-taken, If the rent is �500 then thats gross. After deduction of interest , �400, in the questioners example then the net amount is �100 so in theory �100 is income. In the real worls though there are other expenses to deduct and the whole lot will comeout in the wash in the tax return for the finanial year in question.
All expenses that you incur including mortgage interest (not capital repayments), repairs, insurances, agency fees etc are deductable against rental income received before arriving at any profit. It's fairly straightforward really. Any good agent will guide you and I would strongly urge you to use a good one. I have a number of properties around the country and use Martin & Co because they have lots of offices and you get good advice and service. www.martinco.com