Tax implications for buy to let properties

Tax will be charged on income received from rental properties after allowable expenses are deducted. However, you are eligible for tax relief on the following:

The interest on the mortgage
Rental insurance
Any maintenance of the property
Letting agency fees
10 percent of the rental income each year to cover depreciation in the value of furnishings, including sofas and carpets (this does not include fittings such as kitchen units and bathroom suites)
Professional advisory costs incurred after the purchase of the property.

For more information on tax implications of renting property, you can contact your local tax office for a copy of the Inland Revenue Property Income Manual (PIM), or click below for a direct link.

Inland Revenue PIM

You may also be interested in:

Mortgage calculator
Jargon buster

alexander hall associates limited is authorised and regulated by the Financial Services Authority for pure protection, residential mortgages and general insurance business. We do not charge a fee for residential mortgage advice; however there is an administration fee for processing each of your standard residential mortgage contracts. The typical administration fee is £499. For impaired credit lending the typical fee is 1% of the mortgage loan. For Buy to Let and Commercial Mortgages a fee of 0.5% of the mortgage loan size applies of which £500 is payable on application with the balance payable on completion.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.