Should/can we rent by still keeping our resi and BTL.

Newheight13

Hello,

We currently live in a flat and own another flat that is used as a BTL. We are thinking of applying for consent to let on our resi and letting it out - we have a year left on our fixed rate mortgage. 

We have found a property close to our children’s school at a great price, it was actually a house we had viewed a year ago to buy but it was just too pricey. If we were to rent and gained consent to let, would we only pay CGT on the gains from the day it was rented, and not the 70k approx it’s already made?  Anything else to consider?

Thanks!

Mark_d

Personally I'm not a fan of BTL.  With all the risks and costs associated with letting a property, as well as the tax on rental income, I don't see a real financial benefit

propertyrental

CGT just on the period rented (less final 9 months and sales costs etc). Note - 30 days to pay.

https://www.gov.uk/tax-sell-property

Yes - of course lots more to consider! Income tax, SDLT, Freeholder consent? blah blah

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information

Post 9: Letting agents: how should a landlord select or sack?

p00hsticks

propertyrental said:

CGT just on the period rented (less final 9 months and sales costs etc). 

Strictly speaking it's calculated on a proportion of the gain across the whole period of ownership, the proportion being determined by how long it's been rented compared to how long it's been you main residence (i.e. to stop people trying to claim that it gained all its value while they were living in it but hasn't appreciated at all since then).

theartfullodger

CGT amount will depend on the CGT rules WHEN YOU SELL - not the rules now.

The country needs more tax income, I'm expecting CGT rates (allowances, rates, dates..) to get tougher.  Crystal ball time - not much crystal, a lot of balls...

Bookworm105

propertyrental said:

CGT just on the period rented (less final 9 months and sales costs etc). Note - 30 days to pay.

https://www.gov.uk/tax-sell-property

60 days for residential property 

but I think artfull has the most relevant comment in this thread.
OP do what is best for your children, if that means financial hardship and a lot of tax at a later date then that is a choice worth making 

Newheight13

Thank you all for the advice - lots to consider! 

Newheight13

Can I have 2 BTL’s and one rental running after the fixed resi comes to an end?

propertyrental

Newheight13 said:

Can I have 2 BTL’s and one rental running after the fixed resi comes to an end?

You mean 3 let properties, 2 on BTL mortgages and 1 on whatever mortgage (or mortgage-free) you arrange at that time?

Yes.

Or more.

Bookworm105

propertyrental said:

Newheight13 said:

Can I have 2 BTL’s and one rental running after the fixed resi comes to an end?

You mean 3 let properties, 2 on BTL mortgages and 1 on whatever mortgage (or mortgage-free) you arrange at that time?

Yes.

Or more.

I read it as: they mean live in a flat they themselves rent (to be near the school as they cannot afford to buy it) whilst owning 2 x BTL

that is far from certain as many BTL mortgages require you to own a residential property "in the background"

The usual reason for that is to assure the lender you are not attempting to obtain a property based on BTL financial assessment criteria rather than the "resi" mortgage income multiple assessment criteria 

at the moment Op is suggesting obtaining CTL in their existing residential until their fixed term expires. At which point they may need to re-mortgage and probably be required to convert to BTL, but without owning a resi property. 

That is a question for the mortgage brokers on here.

Newheight13

No sorry, we have one BTL, one resi at present that we live in that we wil request consent to let in, so that we can move into a rented property. So if this goes through we’ll be living in a rental property and have a BTL, and resi on a consent to let. I’m confusing myself!