Cost of Letting our property

rosysparkle

You also need to allow for VAT on agent's fees, so that £600 is actually £705, and the £250 start up fee (we don't charge this)is actually £293.75, and there's the cost of the inventory and any rental insurance, plus repairs....

If you are going overseas and letting your property you'll need to get a CNR number from HMRC by filling on form NRL1, if you don't have this your agent or tenant has to deduct tax and forward it to HMRC, you'll get it back if you aren't liable for it but not until your tax return has been received.

dondoninspain wrote:

Also your agent will have to declare the income to the tax man if you are a landlord living abroad.

Agents have to declare all landlords, not just overseas landlords. Agents get a request for a s19 Taxes Management Act report irregularly and apparently randomly, and all landlords have to be listed on the report.

wolvoman

If you're moving abroad for work then your company should pick up the loss on your UK home.

Or if you're going self-employed then you can use the loss to offset against income tax.

Ian_W

wolvoman wrote: »

Or if you're going self-employed then you can use the loss to offset against income tax.

IIRC you can only offset a loss against income on a furnished holiday let - not a normal residential let. Losses can be carried forward though to set against any future letting profits.

Pili-Pala wrote:

So we're better off selling and putting the equity in the bank and then buy again in 2 years time?

You'll only know that in 2 years time I'm afraid, whatever anyone says no-one *knows* for sure what house prices will do. They may crash, they may continue to rise. If it's the former you're better off selling, if it's the latter you're probably worse off selling than renting it out, even at a small loss, because don't forget that buying and selling also have quite significant costs attached. EA fees, legals, penalties for redeeming a fixed rate mortgage etc all mount up and will probably cost you £5-10K.

As you can't know now which is going to be the better financially I'd look at it slightly differently. In 2yrs are you going to want a similar house in the same area to live in fairly long term? If so keep and rent out. If this house isn't what you want for the longer term either in size, neighbourhood or whatever and you'd be looking to move anyway in a few years you may as well sell now and take your chances on which way the market moves.

dondonsinspain

I would tend to agree don't sell just yet - have you thought about the possibility of renting it to a local company. Some towns have large companies that rent out properties for their staff and they will pay more than the going rate, where I live there was a big insurance company that would carry on paying a retainer even if the place is empty. That way you could get a bit more than you expected and not have to go through the selling bit, which would by the way also incurre costs probably more than the £580 you mentioned above.

sm9ai

You need to remember that the rental market is saturated with properties at the moment.

Rents fall well short of mortgage payments (don't forget that the tenants will probably put in an offer as well!)

Also you need to let your mortgage lenders know which may cost you more as well.

BUT

You are doing this to help pay for the mortgage, not to profit as a business. Having 75% of the mortgage paid is better than 0% of it paid.