Thinking of buying a second house ??

redmalc

Hi any help would be appreciated.
We live in a four bedroom house without a mortgage,our family has now left and me and the wife have thought about buying a nice three bedroom detched house which has come on to the market nearby and renting it out for the next 5/6 years then moving into the house and selling our larger house.
what do i need to be aware of regarding taxes and capital gains ? if i rent the house out do i pay tax on the full rent or can i offset it against the mortgage and day to day expenses

Accountant_Kerry

there are loads of threads on this topic if you do a search. you can offset mortgage interest only and allowable expenses, there will be a capital gains tax issue though, HMRC are your best bet for actual advice on this.

redmalc

Thanks Kerry,will the capital gains issue be on the house we move into,that being the increase in value, if any during the rental period.

googler

Read up on ALL your rights, duties and obligations as a landlord, rather than on tax and capital gains.

PasturesNew

It'll cost you £10k + ongoing expenses to get into/out of the market, if house prices are no different in 5-6 years' time you could come out of it with a loss - and you've had the hassle/risk over that period.

In previous downturns, figures were:
Jul 1985 £77,451
Oct 1992 £76,521
Jan 1996 £72,483
Source: http://www.nationwide.co.uk/hpi/historical.htm

Trollfever

The hazards of running a property rental business:

http://propertytribes.ning.com/forum/topics/property-nightmare

joerugby

Why don't you sell your present house, move in to the smaller one now, and invest the proceeds in a diversified portfolio to suit your future financial requirements? It would probably be wiser than investing even more heavily in residential property right now.

PasturesNew

Trollfever wrote: »

The hazards of running a property rental business:

http://propertytribes.ning.com/forum/topics/property-nightmare

Blimey, you were quick off the mark:

I got a call this morning from the EA that he has some terrible news. The tenat called him and told him that he has moved away and is no longer occupying the property and he is welcome to go in and check or whatever.

Apparently, the whole flat has been wrecked.

Kitchen-GONE
Toilets-Broken
Carpets-Ripped
Toilets-Stripped
Boiler-Taken off.
Grafitti on Walls.

It almost seems like someone was looking for something. I am just shocked right now, because the place was in very decent shape before this and the tenant was actually a decent tenant who never had any issues in past. The whole place has been left as a shell. I am trying to figure out my options here.

And, same thread, different guy:

"I had similar back in the summer - burglary of a newly refurbished house in Bridgwater, done to a really nice standard. All copper pipe easily accessible was ripped out. Next-door neighbour was prime suspect and has just pleaded guilty, now bailed awaiting sentencing."

And, same thread, another poster:

"Sam had a two bed (I think) house ransacked not long ago, everything taken including the velux windows letting rain into the roof! I think it was on her blog."