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    Renting my house to friends.... possibly
    • #1
    • 7th Dec 11, 8:58 PM
    Renting my house to friends.... possibly 7th Dec 11 at 8:58 PM
    I bought a house 2 1/2 years ago that I have not decided if I want to rent or sell yet. But I am buying another house to live in and move in soon! I have secured that mortgage independently of the other with everything disclosed (I work for a bank). So money wise I don't need any advice, however I don't fancy paying both mortgages for long!! and I dont think now is the best time to sell if I don't have to.

    One of my best friends (my best man, father of my godson) is happy to house sit, or rent the house from us as it suits him to do so.

    What is the best way of doing this tax wise?
    I want him to be responsible for council tax etc... really.

    I understand If I rent it at market value to him, I have to pay 20% of the difference between the interest and the rental, which he is happy to do.
    My interest is 432.50 at present although the mortgage is a 30 year repayment which I can overpay on (just starting as it have to re-arrange it so I don't have to live there), and the house would rent for 550-600 so its not the end of the world, I assume I can do this within my tax code being a small amount....

    I have no want to make money from him, just to have my costs covered, so am I allowed to rent it to him for just the interest?

    I also need a rental agreement of some sort for the insurance company (as I now a policy that allows me not to live there and rent it out if I want to, which I can get through work)
    Any templates on line from drawing up a simple agreement?

    The other issue is, do I now have to sell it within 3 years to avoid capital gains tax? even if I rent for no profit?
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