Renting my house whilst I try to sell it

mrswoo55

I am currently considering purchasing a new house but have yet to sell my old one. Am I able to temporarily rent out my current house to help cover the costs without being liable for capital gains when I sell it? Also can I write-off any income against my costs?

anselld

mrswoo55 wrote: »

Am I able to temporarily rent out my current house to help cover the costs without being liable for capital gains when I sell it?

If it has been your main residence, probably yes, you have at least three years immunity from CGT ...
http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm

mrswoo55 wrote: »

Also can I write-off any income against my costs?

You can only write off costs against income which are solely for the purpose of letting, eg mortgage interest, maintenance, wear and tear (if furnished), etc.

RedTomato

It's not easy to get a tenant for a property that is for sale and it's not easy to sell a place with a tenant in situ. If you can't sell it now you are less likely to be able to sell it when tenanted

brit1234

You also may have issues in allowing buyers round if there are tennants, tennants have the right to refuse. Plus they won't have to have it perfectly tidy for viewings. So it could be a lot harder to sell.

Annisele

In addition, if you let the house on an assured shorthold tenancy (which you'd almost certainly have to do) it would be very difficult to get the tenants out within the first six months - even if you sold the property the day after they moved in. If the tenants paid rent and refused to move, it could easily take nine months or more from their move in date to get them out.

googler

Annisele wrote: »

In addition, if you let the house on an assured shorthold tenancy (which you'd almost certainly have to do) it would be very difficult to get the tenants out within the first six months - even if you sold the property the day after they moved in. If the tenants paid rent and refused to move, it could easily take nine months or more from their move in date to get them out.

Exactly what I was about to.....

23rdspiral

if you can afford to buy another house and keep the old one rented out, then why not just do that for a year or so - as long as the rental income covers the mortgage and fees ect... you might find you've got a good saleable asset when the market recovers?

pjcox2005

23rdspiral wrote: »

if you can afford to buy another house and keep the old one rented out, then why not just do that for a year or so - as long as the rental income covers the mortgage and fees ect... you might find you've got a good saleable asset when the market recovers?

That assumes one the market will recover in that time, arguably many think it's more likely to fall further.

Also, do you have the ability/time to become a landlord and the added costs that may occur as a result e.g. void periods, repairs, fees for changing to a buy to let mortgage and the higher interest of such an option.

Alternative view, keep hold of the house and you may have an asset that's fallen further in value and a legal court case ongoing as you try to evict a non-paying tennant (potentially extreme comment, but more than plausable). Too many people seem to think that renting out there current house is a garunteed gold mine!