Simplifying Property Taxes for Your Peace of Mind
Property ownership has become increasing complex over the last decade due to the countless tax changes introduced by the Government. These changes have impacted every stage of property ownership - whether that's Stamp Duty Land Tax surcharge for purchase of additional properties or the abolition of relief for mortgage interest as an expense (commonly known as Section 24).
While these rules were introduced to target Buy To Let Landlords, their impact is felt by many accidental landlords too. Consider a young family looking to upsize to a home and rent their previous apartment - they will not only be subject to a surcharge when they purchase their new home, their relief for mortgage interest on the rented property will also be restricted. This can at times result in net loss for the rented property.
Considering the intricacies of these rules, it is extremely important to get the right tax advice for property matters. That's where we can add tremendous value, as we are a firm of tax specialists. More importantly, our core expertise revolves around property taxes.
Whether you are a first-time buyer worried about the SDLT implications, a landlord seeking to optimise your tax position, or a seller looking to understand the capital gains tax implications. We are here to help!
Property Tax Accountants
Schedule a free consultation with our Property Tax expert to discuss how we can help you optimise your tax position.
Buying a Property
Achieving your dream of homeownership is exciting, but unexpected costs like Stamp Duty Land Tax (SDLT) can turn that dream into a financial strain if not managed properly. SDLT is one of the first expenses you will face upon completing a property purchase, and it can be a significant cost that needs to be factored into your decision making process.
Consulting a tax adviser early in the process may not seem essential, but it can result in substantial savings by helping you take advantage of the various SDLT reliefs available. With the right advice, you can potentially reduce the amount of SDLT payable on your property purchase.
Whether you are a first time buyer, a buy to let landlord purchasing a property through your limited company or a non-UK resident, understanding your specific SDLT implications is crucial to prevent costly mistakes. Each scenario carries different rules and potential reliefs, making it really important to get expert guidance.
Remember, SDLT returns and payments are due within just 14 days of completion. Don’t wait—get timely, proactive advice today to ensure you are not overpaying and to secure your place on the property ladder with confidence.
Getting Renting Income
Landlords in the UK are subject to tax on any rental income generated from their properties. They were historically able to offset various expenses against this income, but recent changes have significantly restricted the expenses that can be claimed against rental income.
One of the most significant change is the removal of mortgage interest as an allowable expense if a property is rented out by an individual. The new rules could result in rental income being taxed at higher rate (40%), while mortgage interest relief is limited to 20%, potentially leading to a net loss after taxes.
For landlords with multiple properties, staying informed about these tax changes and exploring your options is crucial to maintaining profitability.
Get in touch to find out how we can help you keep more of your rental income!
Selling the property
When you sell a property, any gains are subject to Capital Gains Tax. For non-residential properties — the rate is 10% or 20%, and for residential properties — it is 18% or 24%, depending on your tax bracket.
There is a new requirement to file a capital gains tax return with HMRC within 60 days of selling the property. This applies to all property disposals by non-UK residents and those by UK residents resulting in a tax liability.
Additionally, the disposals still need to be reported on a self assessment tax return by 31 January following the end of the tax year in which the disposal is made. HMRC may charge penalties if either of these returns are not submitted on time.
Don’t risk penalties—Speak with us today to ensure your property sale is appropriately reported!
