quick help needed re renting out a house

[Tortington]

tell me what i have to lok out for with regards money.

specifically any tax implicatins

i presume you are obliged by law toget a as check annually

dont want megga detal right now

this is for BIL as he has a rather urgetn situation

[Tortington]

after three years capital gains tax???

i dunno

what isthat about

[DelGirl]

You have to pay income tax on your profit but you can offset quite alot with expenses. Thats about it in a nutshell. Can you be more specific?

[DelGirl]

afaik and it may well have changed, if you have lived in the property for 2 years or more as in your bil, then you don't have to pay capital gains or at least you pay the minimum and it's on a sliding scale.

I would have thought it's better to rent out than leave a place empty or is he hoping he'd sell?

[DelGirl]

wrt to checks, he would have to get an annual landlords certificate for gas appliances.

[DelGirl]

are you taking note custy

[claricebeansmum]

As I understand it if you mortgage repayments are more than the rent you can claim back the tax on the interest.

You have to have a certificate for gas.

If it is his main residence and he sells it within 3 years then there is no CGT to pay. If he sells it after 3 years then there will be CGT to pay on any increase in value from the date he moved out (so wise to get a valuation from local estate agent which he can keep on file - get a couple and keep the maddest highest.

[PestoMonster]

If he rents out a property make sure he keeps good records of all income and expenditure related to it, for example letting agents' fees, gas safety certificates (which need to be done annually), as he will need to declare the rental on his tax return.

A very well-known letting agency in these parts is

www.leaders.co.uk/ Leaders

and if he looks at this website I think he will find it helpful. I think they also do a Landlords' Information Pack, which you could get hold of. They are based in Brighton near Al Duomos.

[PestoMonster]

Leaders

[DelGirl]

Thats who I rent mine out through

[PestoMonster]

We let ours through

Parks

[fiodyl]

Where is the property? He can rent it to me if he likes

[Tortington]

the property is in oldham

thanks all - your suuuuuuper

[Tortington]

i have had a look around but i can't see it anywhere - can you tel me how much per month property management agents are likleyto cost

is it 1%?

[feetheart]

Can be anything from 10-17% but be VERY careful. I went with an independant bloke but he retired on ill-health grounds within a year. The shower who took over were a nightmare and it took 3 CCJs and most steps along the way to getting the company put into liquidation before I got my money back (they were collecting rent but not passing it on!) I was lucky as they have since disappeared owing a lot of people a lot of money.

If I had to go through an agent now i would use a big name with guarantees to the hilt and even then not expect much but I'm a cynical old sod

[jingleyjen]

I have just stopped going through and agent because I didn't feel I was gettign anything for my 11%.
However when I have to change tennants I may well go through an agent again. (I have an elderly couple in there at the moment and they are brilliant)

[LIZS]

Inocme has to be declared ona tax Return but you can offset interest mortgage payments(not capital repayments), maintenance costs(incl gas/electric checks), insurance and fees against the income so only liable on any net profit. Fees can be upwards of 5% rental per month for basic finding tenant/advertising to full service incl contracts, inspections, dealing with maintenace issues etc of around 15%. You can sometimes pay the lower and add extras such as drawing up contract and inventory for a fixed fee. Gas certificate is annual but electrical check every few years. CGT liability depends if he has lived there as his principal private residence and then tapers over time with relief as to how long ago and how long let out before selling , quite complicated .