MattN

Does anyone know if you have to pay tax if you rent out a property?

I'm thinking of renting my flat out for 6 months whilst I rent closer to work, however what with all the fee's etc. It's not looking good value for money and if I have to pay tax as well...

cheers

scoob_babe

If done legally and declared, yes you will pay a form of (income ?) tax on it

Tiggs

as above- its unearned income so once its netted down (take of cost as described above) you pay tax at whatever your rate is.

T

MattN

that's just sh1te then.

So basically if I get £500 pcm for my flat after tax and fee's etc. I see £300.

IanWatson

Matt - don't be downhearted - that's not what people have said!

You WILL have to pay income tax on a proportion of of the rent, but only what's left after various deductions related to such things as interest on the mortgage, 10% "wear and tear", insurance, letting agency costs etc.

You may find that there's not a huge amount left to declare to Mr Taxman if you get the right advice

MattN

Never read posts after a hard days drinking, it distorts it too much.

I'll get some finance bods on the case.

Cheers Chaps.

Olly

Very briefly, rent is taxable income so the answer is yes. However any out of pocket expenses incurred in letting and maintaining the property itself, such as advertising, insurance payments, maintainence (but NOT improvements eg extention), agency fees, gas certificate etc are tax deductable, as is interest paid on the mortgage payments (if you have any). Also wear and tear allowances can be made. Well worth speaking to a good accountant to look at you circumstances and advise you accordingly.

[Edited by Olly - 4/6/2003 5:53:15 PM]