Selling/renting my property

Tobes17

Hello
i currently have a flat with mortgage but will be buying a property with my boyfriend. If I sell it for £25k more than I bought it how much capital gains tax will I pay?
Also if I don’t sell my flat but rent it how does this affect my income?

Keep_pedalling

No CGT on selling you primary residence.

Tobes17

I got that wrong. If I was to keep my flat and rent it out and then sell it and have another property how much CGT would I pay if I sell it making £25k profit? 

Newbie_John

It's likely that your mortgage won't allow for renting - so you would need another one more expensive one for landlords.

For the second property you will also pay stamp duty (not half, but full amount)

On second properties with a purchase price between £40,000 and £125,000, you pay 5% Stamp Duty. Then: Between £125,001 and £250,000, you pay 7% Between £250,001 and £925,000, you pay 10%.

Roughly £27k for £300k property, if it was your only property it would be "only" £4k stamp duty 

Tobes17

So if I keep my flat and rent it out I would need a new Rental mortgage and as far as the new property which I’m buying with my boyfriend (who will be selling his property to buy new one), if the new property costs £800k approx, I would pay more Stamp Duty than my boyfriend as I still own my flat?

_Penny_Dreadful

Tobes17 said:

So if I keep my flat and rent it out I would need a new Rental mortgage and as far as the new property which I’m buying with my boyfriend (who will be selling his property to buy new one), if the new property costs £800k approx, I would pay more Stamp Duty than my boyfriend as I still own my flat?

Your current lender may give you consent to let otherwise you’ll need to get a BTL mortgage. 

There is only one stamp duty bill for the property purchase, not one for you and one for your boyfriend. It’s up to the pair of you how you pay for it. 

Assuming your purchase is in England where the relevant tax is SDLT then rather than paying £30,000 you’ll have to pay £70,000 because you’re purchasing an additional residential property. 

_Penny_Dreadful

Tobes17 said:

I got that wrong. If I was to keep my flat and rent it out and then sell it and have another property how much CGT would I pay if I sell it making £25k profit? 

That’s impossible to answer. It would depend on the CGT rules and your income at the time you sell the property. What we have seen happening over the past few years is the personal allowance for CGT reducing. 

Newbie_John

Tobes17 said:

So if I keep my flat and rent it out I would need a new Rental mortgage and as far as the new property which I’m buying with my boyfriend (who will be selling his property to buy new one), if the new property costs £800k approx, I would pay more Stamp Duty than my boyfriend as I still own my flat?

It's up to you two to decide how you pay the stamp duty fee.

If you keep your flat - you both will face £40k more expensive stamp duty which you can pay yourself, you can share.. 

Does your partner own any other properties? If he does then stamp duty will still be £70k no matter what you do, but if he doesn't then keeping your flat means £70k fee, selling flat means £30k stamp duty fee.

sheramber

Remember if you let it you have to comply with all the rules that apply to a landlord.

Your rental income, less allowable expenses , will be subject income tax.

Your mortgage payments are only allowed as a credit @20% from the tax due.