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Renting out main residence - tax implications

bigelpresidente
Posts: 15 Forumite

I'm thinking of renting out my main residence and going to live in my partner's house. The reason is that the property sales market is very poor at the present time and similar properties to mine are not selling. If I moved in with my partner and shared bills, etc... would there be any tax implications? There is no outstanding mortgage on my property.
Thank you
Thank you
0
Comments
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The net profit you make from letting the property is taxable income.2
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There are at least 10 taxes a landlord may pay - income tax, CGT, etc etc etc. Buy a book on property taxes -it will save you time and ££££.
Done any training or education on being a landlord and/or landlord/tenant laws and regulations (more than 100)?? The alternative (ignorance) usually more painful.
Do you have the financial AND emotional reserves to cope with the tenant-from-hell (or agent-from..) who doesn't pay rent for say 7 months whilst you pay mortgage, legal costs, court fees etc to evict and repair costs ? Repair costs? Well if you don't pay then judge may decide you are harassing tenants and side with them.
Most years I make £££ from B2L - but not always (since 2000).
Tenant is legally entitled to your actual home Address.
Which country? (Wales, NI? ) . The laws are different.
Good luck......2 -
You pay tax on the rent you get and if you move in with your partner then the house you are renting may be deemed a second home so you will pay CGT on it when you eventually do sell it
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obviously it ceases to be your main residence since you no longer occupy it, a tenant now occupies it
you will pay income tax on the rental profit
the tenant will be legally liable for council tax (you will only be liable during tenancy void periods)
you will be liable for Capital Gains Tax when you finally sell it based on the % of your total ownership time during which it was let. You will doubtless not understand that, so study this example:
purchased in year 2000 at 150,000 cost lived in as main residence until 2024. Let from 2025. Sold in 2030 for 310,000
Overall gain 310-150 = 160,000. Let period (in months, not years) 2030-2025= 60 less final 9 months auto exemption = 51 months. Total ownership 2030-2000 = 360 months. Let period subject to CGT 160,000 x (51/360) = £22,667. CGT rate payable on £22.667 will be a mix of 18% and / or 24% depending on your financial position in the year of sale, so worst case, all at 24% = £5,440 tax payable out gross sales proceeds of £310,000
presumably your partner currently claims single person discount for her council tax, so obviously she will lose that.
shared household bills have no tax implications
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Landlord liable for council tax if a HMO or part of property excluded.1
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FlorayG said:You pay tax on the rent you get and if you move in with your partner then the house you are renting may be deemed a second home so you will pay CGT on it when you eventually do sell it
CGT applies to any property you own which you do not occupy as your own main residence.
"occupation" does not depend solely on how many properties you own. If you live with the girlfriend then it ceases to be your main home even though you may only own one property. That also has implications for council tax as to claim single person discount during lettings void periods would be tax fraud since it is not occupied as your own main residence.2
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