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

2

Comments

  • Bookworm105
    Bookworm105 Posts: 1,740 Forumite
    1,000 Posts Name Dropper
    edited 1 August 2024 pm31 3:12PM
    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! 
    property A - current home. To be converted to CTL property. CTL normally for a time limited period and not always rolled over. May need to convert to BTL to remain as owner when CTL expires. That may be difficult without an underlying resi property you also own and live in as such is frequently a requirement for a BTL mortgage..

    property B - existing BTL to remain as such. Absence of an owned resi property may cause a breach of that existing BTL mortgage terms 

    property C - one they rent themselves, not own 

    a question for the mortgage brokers... there almost certainly will be a lender willing to entertain that mix, but at what premium price???
  • saajan_12
    saajan_12 Posts: 4,478 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    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!
    CGT just on the period rented (less final 9 months and sales costs etc). Note - 30 days to pay.

    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?


    Well not exactly, would be the gain over the whole time you owned it, pro rata for the time it was let except 9 months. 

    Eg say you've owned and lived there for 5 years and gained 70k, then you continue to own and let it for another 5 years. Under current rules, the Capital Gains Tax is on just under half of the gain over the whole 10 years.  
     *  If it gains 100k in the next 5 years, then CGT would be for 4.25 / 10 years x the total 170k gain, ie on 72k of the gain, ie you're quids in.
     *  If it gains nothing in the next 5 years, then CGT would be for 4.25 / 10 years x the total 70k gain, ie on 30k, ie you lose out. 

    Basically there's no valuation at the move out date that's taken into account and the assumption is that the gain over the whole time you owned it was gradual. 


  • Thanks guys - nothing is simple when it comes to homeownership is it! 
  • Hello,

    I have had some good advice on this already on another post but want to focus on this question solely as some information seems
    to be conflicting. 

    We have owned our property for 3 years and is now worth 70k more than when we purchased it. In short, the plan is to apply for CTL and rent it out as we plan to move into other rented accommodation. My concern is that I’ll have to pay capital gains on the 70k already?

    Thanks
  • user1977
    user1977 Posts: 16,743 Forumite
    10,000 Posts Sixth Anniversary Photogenic Name Dropper
    edited 2 August 2024 pm31 3:34PM
    All I see on your previous thread on this point are two posters giving consistent advice - why don't you believe them?

    https://forums.moneysavingexpert.com/discussion/6544255/should-can-we-rent-by-still-keeping-our-resi-and-btl/p1
  • Newheight13
    Newheight13 Posts: 215 Forumite
    Third Anniversary 100 Posts Name Dropper
    edited 2 August 2024 pm31 3:34PM
    I do believe them, it’s advice on other accountancy firm pages that slightly differs, so just a few more confirmations here for me to make a decision. Thanks  
  • deannagone
    deannagone Posts: 1,096 Forumite
    1,000 Posts Fourth Anniversary Name Dropper
    If you sell both properties would that allow you to buy a property in the area you really want to live in?  However, I would imagine you've already investigated this possibility!
  • propertyrental
    propertyrental Posts: 3,391 Forumite
    1,000 Posts First Anniversary Name Dropper
    edited 2 August 2024 pm31 3:34PM
    care to share the advice on the accountancy pages? Easier to comment on it then.
  • theartfullodger
    theartfullodger Posts: 15,419 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 2 August 2024 pm31 3:34PM
    If you could kindly tell us what CGT rules, rates and regulations will be when you sell them we can let you know.  Until they are known any answer will just be a guess 

    But I'm assuming CGT rates are going up after ... err.. history...

    Keeping asking them same questions in the hope of a "better" answer is likely to lead to disappointment and sadness.
  • Newheight13
    Newheight13 Posts: 215 Forumite
    Third Anniversary 100 Posts Name Dropper
    edited 2 August 2024 pm31 3:34PM
    Ok so I guess the key question is, could I let out my residential for 9 months without having to worry about CGT if I choose to sell at that point?

    Thanks guys. 
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