House tied with job

Paul_VW

I have a great opportunity to rent a house on site of the farm where I work, now the big problem is;

I currently pay £400 a month on my mortgage, and if I rented it out this would cover it plus have £100 extra a month

Now the cottage is £850 a month rent, so this leaves me £350 short the boss can increase my wages by £100 a month so this still leaves £250, I cant afford to pay any extra.

My question is there a way such as a tax break or loophole that I could have my wages increased but without paying the extra amount of PAYE that would come with it? (Like a company car sort of thing?)

I would love to get the house, there must be a better way than paying lots of tax!

Madjock

in a word, no, plus you would have to pay the tax on your rental income. People with company cars don't get tax breaks, btw, they pay through the nose, depending on the car they drive.

hcb42

you are 350 short, boss has offered to pay £100 so near enough 1/3rd, would seem like this is the break you were after

jobbingmusician

You are also likely to have to pay tax on the perk of having the cottage, in fact, if £850 is actually not a commercial rent for the property. Suggest you (also?) ask on the tax board.

mountainofdebt

I'm sure I'm missing something but why would you even consider renting the cottage?

I could understand the attraction if it were free but it isn't. Also aren't you double accounting ? Why would you only have to find £350 ? Wouldn't it be £850 as the £500 from renting your house be needed to pay your mortgage?

CFC

I don't know whether it is possible to implement a salary sacrifice for it. Could be worth looking into.

Daedalus

So how are you going to pay for a broken boiler in your rented out property? That is what the £100 should be put aside for.

LittleVoice

mountainofdebt wrote: »

Also aren't you double accounting ? Why would you only have to find £350 ? Wouldn't it be £850 as the £500 from renting your house be needed to pay your mortgage?

The OP's logic is that the £350 is the additional amount he needs to find.

£850 is the cost of the proposed cottage,
he is used to paying £400 mortgage,
so that reduces the extra to £450.
Then the rent he would receive is £500,
£100 more than the mortgage.
That £100 then reduces the extra required to £350.

Paul_VW

Daedalus wrote: »

So how are you going to pay for a broken boiler in your rented out property? That is what the £100 should be put aside for.

I will get £625 for my property, and will be putting £100 away a month for tax and repairs etc.

Looks like the dream is over then

Rockporkchop

You could maybe rent out a bedroom in the cottage under the rent a room scheme and get £351 a month which is non taxable (if that is allowed on a rented property, I don't know). I can't see the appeal myself, I like to get as far away from work as possible when I finish!

Are you currently paying out hundreds in travel/petrol to work which would cancel out the extra rent?

Bigmoney2

Your thread title reads 'house tied with job'.

How secure is the job? Assuming you went ahead and let out your current home and rented the house, what would happen if you lost the job? Would you also need to vacate the farm house.

Your mortgage provider would also need to consent to your letting your current home and can stipulate the type of tenant e.g. no housing benefit tennants or students and its not unheard of to increase the interest rate to the buy to let rate.

I can only assume that the farm house is much nicer or in a better location than your mortgaged house otherwise why would you want to change a £400 mortgage to £850 in rent.