Becoming a landlord, tax questions

M03

Hi all,

I am about to become a landlord due to a change in circumstances. I have been reading up on the tax rules but there is an aspect I am not clear about.

I moved out of the property in November and have a tenancy at a new property to prove this. The property was initially on the market to sell until June but without success. Then it was on the market to rent and the tenants move in in August.

My question is how much of this period counts as a void whereby I can claim tax relief on the service charge, council tax and mortgage.

Can I claim since the date I moved out? Or since the date it was officially on the rental market?

If the former, since it spans financial years, do I need to register for self assessment this year and report a "loss" in 2022-23?

Thanks 

anselld

The period since it was actively on the rental market.

housebuyer143

Council tax varies council to council and some give you 6 months free if it's empty and unfurnished. Give them a call to find out if you are eligible for the free period. After that it's when it's been advertised to rent.

M03

Thanks both, I suspected that was the case. Unfortunately my council does not offer discounts for empty properties.

As a follow up question, can costs incurred prior to listing it on the rental market, but directly related be claimed. Specifically EPC and EICR costs?

anselld

M03 said:

Thanks both, I suspected that was the case. Unfortunately my council does not offer discounts for empty properties.

As a follow up question, can costs incurred prior to listing it on the rental market, but directly related be claimed. Specifically EPC and EICR costs?

It is unlikely you would have needed an EPC soley for the rental market since you would previously have needed it for the sales market, but EICR yes.

M03

Our ECP actually was actually valid during the time it was on the sales market but would have expired while listed to rent. It was a strange coincidence..it expired 3 days before the property was listed but we renewed it 7 days before it was listed, but well into discussions with the lettings agent.

Probably an unusual case but I think it is justified?

anselld

M03 said:

Our ECP actually was actually valid during the time it was on the sales market but would have expired while listed to rent. It was a strange coincidence..it expired 3 days before the property was listed but we renewed it 7 days before it was listed, but well into discussions with the lettings agent.

Probably an unusual case but I think it is justified?

Yes in that case should be fine.

M03

On the same theme, are mortgage overpayments treating in the same way as normal payments? As in, does the 20% tax break apply?

sheramber

M03 said:

On the same theme, are mortgage overpayments treating in the same way as normal payments? As in, does the 20% tax break apply?

You can only claim tax credit on the interest part of your mortgage payment. You cannot  get relief on any capital repayment.

M03

sheramber said:

M03 said:

On the same theme, are mortgage overpayments treating in the same way as normal payments? As in, does the 20% tax break apply?

You can only claim tax credit on the interest part of your mortgage payment. You cannot  get relief on any capital repayment.

Oh yes my mistake. Thanks