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Caporegime
The £1,000 property allowance is the same principle as the self employed trading allowance of £1,000.
It's used to work put your profit from your rental, where you take your rental income and deduct either the £1,000 allowance or the direct expenses, whichever is greater.
The profit of the rental is then added to any other income, pension, interest etc to give your total annual income. Your personal allowance is then deducted and the remainder taxed at the appropriate rates.
The difference with rental income and pensions to PAYE is you only pay income tax on them, not NI.
Soldato
Quite an interesting thread, I’ve not read all of it yet but the first 10 plus pages.
I’m currently paying the mortgage off on my single house, but I’m in the situation where it’s possible for me to purchase another house and rent one of them out.
I don’t particular like the area that I live in nor am I bothered about staying in this part of the UK, I moved here for work.
Ideally I would like to buy a place for my retirement in/near my childhood city and rent it out until I can retire then move into it and rent out my current place to help fund my retirement.
I’m not sure on my plans at the moment, like said; I’m currently paying off a mortgage and investing in stocks/shares and REITs. I could bin that all off and hammer down my mortgage till it’s paid off then look for another property or look for/secure another property now and pay both mortgages off.
One thing for certain if I do get a place to rent, it would be fully managed by an estate agents.. I couldn’t be dealing with people.. but then again I can’t stand dealing with estate agents, I’ve rented for long enough and the experience of buying a house has put me off them, hence why I’ve not moved (yet).
Maybe the sensible path would just be to pay off this place, carry on investing and see how I feel later on in life…
I’m currently paying the mortgage off on my single house, but I’m in the situation where it’s possible for me to purchase another house and rent one of them out.
I don’t particular like the area that I live in nor am I bothered about staying in this part of the UK, I moved here for work.
Ideally I would like to buy a place for my retirement in/near my childhood city and rent it out until I can retire then move into it and rent out my current place to help fund my retirement.
I’m not sure on my plans at the moment, like said; I’m currently paying off a mortgage and investing in stocks/shares and REITs. I could bin that all off and hammer down my mortgage till it’s paid off then look for another property or look for/secure another property now and pay both mortgages off.
One thing for certain if I do get a place to rent, it would be fully managed by an estate agents.. I couldn’t be dealing with people.. but then again I can’t stand dealing with estate agents, I’ve rented for long enough and the experience of buying a house has put me off them, hence why I’ve not moved (yet).
Maybe the sensible path would just be to pay off this place, carry on investing and see how I feel later on in life…
Caporegime
Honestly, I don't know how many new landlords are entering the market right now. Its not an entirely lucrative game in the near future. I don't know much about BTL mortgages on normal homes but my partner is just remortgaging on a HMO and the rates aren't great. She only has £100k left on the mortgage (on a £600k+ house) but once all said and done, shes not making that much money once you consider the interest, the EA fees, the maintenance costs and tax implications. I'm not saying that its not been a great investment but if she was buying that place now it simply wouldn't work unless she was getting a tiny mortgage on it.
Rates are high, the government and slowly but surely making it harder to make money from being a landlord and house prices are unlikely to rise as quickly as they have done in the coming years which is where a lot of people have made their money.
You would almost certainly be better leaving that money in the markets. It doesn't cost you any time/stress or money for the most part. Will likely give you a much better return as well.
That being said, I'm not a financial advisor.
Soldato
I've been speaking to accounts that are in the family... I may get away with BTL mortage if I pay off this house first then pay a second home, no doubt the rate will be slightly higer than a normal single house mortage.
The point of placing the house in my name or a company name, I'll will have to pay stamp duties no matter what as it's a second home.. but the stamp duties on a company buying a house could be more.
It's just something that I've been thinking about for a bit, just need to get some figures down at some point... but it now looks like I need another car as my car has just failed it's mot.
It's issues of liability and tax and the long term that should be your focus. Remember that with a company ownership, you pay everything gross of tax whereas with personal ownership much has to be paid after tax. Against that there may be VAT registration, accountants, and whatnot. Again, you should take professional advice.
Caporegime
He should for sure. In my recent personal experience the government are making it harder to make money from property for landlords and they are making it harder to make a LTD company tax efficient for individuals.
BTL just isn't worth it anymore. Government policy has been to make it less attractive and it worked. Higher interest rates and plateauing property prices are the final nail in the coffin. I got out last year at perhaps 3-4% under peak prices and so glad about it.
Expect future policies to make it even less attractive after Labour win the next election.
Expect future policies to make it even less attractive after Labour win the next election.
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Thanks. So the personal allowance is applicable, that's good to know.
Soldato
Good.
Soldato
LOL, and where do you do think those who can't afford a mortgage are going to live?
Soldato
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Yep, just notified my tenants that I'm not renewing the contract this year and selling the property
How long will you be saying that as rents go up and up and up.
Soldato
Yes because they are not going up and up and up and up already and have been for a long time.
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Soldato
Careful not to fall off that high horse.
Also, houses disappear when a landlord sells them.Yes because they are not going up and up and up and up already and have been for a long time.
Yup. Big house black hole.Also, houses disappear when a landlord sells them.