David Astburyshas remained positive throughout this Brexit saga, this has benefitted us enormously.

Some people have been scared off; however, many have continued to buy and find opportunities with David Astburys, including buy to let investment properties.

What taxes should you be aware of on a BTL property, to ensure you’re making a sound and thoughtful investment?

 

Stamp Duty Land Tax (SDLT)

SDLT is tax you pay when you buy a property. There is a standard calculation when you buy your main home, which goes up the more expensive it is. The same applies when buying further properties, but includes an additional 3% rise.

You need to pay this supplement whether it’s a second home, a new home if planning to rent out your current one (known as ‘let to buy’), or a BTL purchase, even if you’re living in rented accommodation yourself.

You can’t avoid the 3% by saying you own one property and having your spouse buy the second in their name. You and your spouse are considered to be one ‘unit’.

 

Stamp Duty Land Tax Examples
Purchase price SDLT
£250,000 £10,000
£400,000 £22,000
£550,000 £34,000

Income tax

You are liable to pay tax on income earned from rental property. This is income tax if it’s a personal purchase, or corporation tax if you own it through a limited company. The amount depends on rental income, mortgage interest and other tax-deductible costs.

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