best rate buy to let

cam5

i agree and disagree with whats being said, but i think whats good me may not be good for you, thanks for your comments with capital gains if i sell, is it still 40% to pay i bought property 2 years ago, and got a btl, how long to i need have it before cg is reduced is it still 10 years, and after that cg to pay is 23%

Gorgeous_George

You have gained no taper relief yet and from next April, cgt is reduced tp 18 % regardless of length of ownership.

GG

dunstonh

There will be no reliefs available to you and after April next year it will be 18% flat.

Your immediate issue though is income tax. By switching to repayment and reducing the mortgage, you will have to pay some income tax on the rental income.

You will be losing around £200pm on the £30k you reduce the mortgage by to cover a loss of around £200pm on the rental income. You will then have to pay some income tax on top of that increasing your loss further.

Very roughly, you will have to see property price gains of around 3% a year just to break even and another 3.5% to cover inflation which means unless you see growth in excess of 6.5% a year you are making a loss in real terms. Possibly more as I havent included the fact your equity isnt providing any income.

mystic_trev

dunstonh wrote: »

Very roughly, you will have to see property price gains of around 3% a year just to break even and another 3.5% to cover inflation which means unless you see growth in excess of 6.5% a year you are making a loss in real terms. Possibly more as I havent included the fact your equity isnt providing any income.

Very good post dunstonh.

The OP has a substantial amount of equity in the Property and only just breaks even with a repayment mortgage, and this without allowing for voids, or one of those troublesome tenants who stops paying rent and sits it out for three months until you evict them! However, if the OP (with 40% equity in the property) is just about breaking even :rolleyes: God help the tens of thousands who've entered the BTL market in the last couple of years!