Can't sell flat, no choice but to let it, tax issues... :(

RobertoMoir

Yeah I'm sorry if i've let the air out of your tires a bit, not my intention. In the end I only ended up buying a place because it was my mother's and after she passed away I wanted to keep it in the family.

The market is poor in general because its slow and as you say people who don't need to sell are waiting. If you want to sell is there a way to get your flat noticed above the rest of what's out there?

brooky_agb

Hmmm. Not according to my accountant.

Fella

It's not a good time to be entering BTL unless it's something you absolutely want to do (poor yields, increasing legislation etc etc). I think you're right to sell & you seem to be serious about doing so so I think you'll probably get it done sooner than most.

brooky_agb

Thanks Fella. I need to sell and get equity out to be able to have furniture and stuff for the new place too. I have no choice.

silvercar

brooky_agb wrote: »

Thanks Fella. I need to sell and get equity out to be able to have furniture and stuff for the new place too. I have no choice.

You would have the rental income.

brooky_agb wrote: »

Hmmm. Not according to my accountant.

You need an accountant who has expertise in rentals. (Actually for a single property rental, you probably don't need an accountant.)

Mortgage interest is an allowable expense against rental income. There is no obligation to secure the loan on the property being let. If you had not retained the flat you would have had a smaller mortgage on the new place; therefore the extra amount taken on the mortgage in order to keep the flat is an allowable expense. The amount you can claim is restricted to the value of the rental property when first let.

brooky_agb

silvercar wrote: »

You would have the rental income.



You need an accountant who has expertise in rentals. (Actually for a single property rental, you probably don't need an accountant.)

Mortgage interest is an allowable expense against rental income. There is no obligation to secure the loan on the property being let. If you had not retained the flat you would have had a smaller mortgage on the new place; therefore the extra amount taken on the mortgage in order to keep the flat is an allowable expense. The amount you can claim is restricted to the value of the rental property when first let.

Agreed but the flat has no mortgage so I can't set it against it unless I remortgage.

silvercar

brooky_agb wrote: »

Agreed but the flat has no mortgage so I can't set it against it unless I remortgage.

silvercar wrote:

Mortgage interest is an allowable expense against rental income. There is no obligation to secure the loan on the property being let. If you had not retained the flat you would have had a smaller mortgage on the new place; therefore the extra amount taken on the mortgage in order to keep the flat is an allowable expense. The amount you can claim is restricted to the value of the rental property when first let.

The loan can be secured on the property you are buying, or even not secured. There is no obligation to secure the loan on the let property.

In a more usual situation (at least before the credit crunch), people would increase their residential mortgage to raise the deposit and get a BTL mortgage for the remainder. Both parts were allowable as expenses of letting.

For those that owned outright, it is often cheaper to raise a residential mortgage to buy a letting property outright - the interest is still an allowable expense.

brooky_agb

Thanks. Thats great to know.

brooky_agb

Well. The good news is that I have accepted an offer. A totally !!!! offer but I just don't care any-more. I think I am a good advert to the fact that there are some bargains about if you look and negotiate hard.

Fire_Fox

It looks like a lovely little flat, but it does look very small. If prices have fallen as much as it is touted then two beds are selling now for what one bedroom flats were selling for two years ago. FTBs are in no worse a position income wise than they were two years ago, so why not stretch to a two bed?