Mortgage tax relief on BTL properties

[IR35 Avoider]

Unless there's been a recent change I've missed, interest on a loan taken out to fund a business is a tax-deductible expense. Whether the loan is secured and on what property (in the case of buy-to-let business your own or the BTL one) should be irrelevant. For a loan taken out on your own property you may be called on to prove it was specifically taken out for the purpose of funding the BTL.

[Mich the Tester]

Jesus! Next you will want our help in wiping your arse as well.

I think Gricerboy does that for him.

[fullyautomatix]

Ok, tax relief is the wrong term for this.

I was referring to offsetting the mortgage costs against rent received .

Another question which I'm sure will expose me to the ridicule of Northern Blad - what are your views on holiday lets vs normal residential lets? Seems to be higher returns possible IF you get the punters in ie full up most of the summer and weekends rest of the year.

Jesus! Next you will want our help in wiping your arse as well.

[BoredBloke]

Yes MIRAS is dead......watch out for the window tax though!!

[Malcolm Buggeridge]

Ok, tax relief is the wrong term for this.

I was referring to offsetting the mortgage costs against rent received .

Another question which I'm sure will expose me to the ridicule of Northern Blad - what are your views on holiday lets vs normal residential lets? Seems to be higher returns possible IF you get the punters in ie full up most of the summer and weekends rest of the year.

[Mich the Tester]

In fact I advocate a tax on sockies.

ftfy

[Scrag Meister]

MIRAS

Died in 2000.

[northernladuk]

There is no special treatment on the asset sale apart from your usual capital gains tax free allowance.

The original post is however badly written. If I read it correctly he is asking can Mortgage costs be taken from the rent on the BTL. The answer to that yes now, and I can't see it changing but who really knows what the future holds.

Bearing in mind the interest is a cost to a business you would think it only natural it could be offset like any business model but the last line says it all. Common sense and reasonable assumptions are not a gaurantee it will stay that way.

If they do change it everyone will start looking for loopholes to put it through a business and HMRC are gonna have a bloody headache trying to regulate that many businesses handling a single property or two.... or just not tell the tax man they are doing it as I am sure is the case in a huge number of BTL's. But again.. who knows.

[fullyautomatix]

There is no special treatment on the asset sale apart from your usual capital gains tax free allowance.

The original post is however badly written. If I read it correctly he is asking can Mortgage costs be taken from the rent on the BTL. The answer to that yes now, and I can't see it changing but who really knows what the future holds.

I doubt he would mention it as tax relief if that was the case. You have to credit some intelligence to this sockie at least.

Anyway, mortgage costs from the rent is probably the only business model in BTL which makes it worthwhile and possible to do. Or else the bank wont provide a mortgage.

[eek]

Perhaps he means capital gains tax, but is there a relief for BTL on capital gains ?

There is no special treatment on the asset sale apart from your usual capital gains tax free allowance.

The original post is however badly written. If I read it correctly he is asking can Mortgage costs be taken from the rent on the BTL. The answer to that yes now, and I can't see it changing but who really knows what the future holds.

[DimPrawn]

Good News!

HM Revenue & Customs: Mortgage interest relief

This section gives estimates of the cost of income tax relief for mortgage interest payments.

Bad News!

Relief on mortgage interest repayments was removed on 6 April 2000. Mortgage interest relief for those aged 65 and over who take out loans to buy a life annuity (a home income plan) ended with effect from 9 March 1999, but existing loans will continue to qualify for the remainder of the loan period.

[fullyautomatix]

Do you mean you can offset the interest of the BTL against your income from it?

Perhaps he means capital gains tax, but is there a relief for BTL on capital gains ?

[northernladuk]

Do you mean you can offset the interest of the BTL against your income from it?

P.s don't even bother if you are only looking for 3-5 years in it. You are more likely to end up losing with costs of buying and selling, CGT etc taken in to account.

Saying that there is so much fundamentally wrong in the post I can only think this is just a load of crap you are making up

[fullyautomatix]

I know you are a dull sockie and a stupid one at that but I will still bite and ask , what the hell are you on about ?

Which country is this ? Not heard of a tax relief for mortgage in UK. Especially BTL. In fact I advocate a tax on the BTL scum parasites.

[Malcolm Buggeridge]

I'm thinking of dipping my toe into the BTL market for the first time in the light of poor pension performance and low returns on cash ISAs.

I'll be releasing some equity on my own house to do this though and will be getting a mortgage.

This means that for this to remain a worthwhile income stream, I would depend on mortgage tax relief remaining in place during the term of, say, 3-5 years (at which point I plan to sell up and cash in on the hoped for increase in value - we are, after all, at the bottom of the house prices curve (?!)).

So, my question to the esteemed financial sages of this forum is this. Do you think it possible or likely that this tax relief could be abolished in the next few years?