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We want to rent out our Manchester house when we move but what are the tax implications? | taxes

Posted on 10/05/2023 by

Q My partner and I currently own a property in Manchester. We purchased the house in 2018 and the value has risen from £150,000 to £200,000. I have been offered a job in London and will be moving there in three months with my partner. We can’t afford to buy in London, so we would like to rent out our house in Manchester to cover the mortgage. This is to ensure that we can stay on the property ladder. What kinds of fees and taxes can we expect to pay? And would there be any implications if and when we came to sell the house?
LG

A The first thing you need to do is ask your mortgage lender whether it will give you permission to rent out your house. If it wills, there may be a modest fee for its “consent to let”. However, if letting your house is a complete no-no in your lender’s view, you will probably have to switch to a buy-to-let mortgage. However, this will be possible only if the loan (ie what is left on your current mortgage) represents less than 75% of the current value of your home. In addition, the rent you get on it needs to be at least 125% of the mortgage you pay. This is not based on wishful thinking but on an assessment by a professional letting agent, who will tell your prospective lender whether you are likely to achieve that level of rental income. If that doesn’t, one option would be to switch from a repayment mortgage to an interest-only one, which makes the monthly payment lower.

Another thing to think about is how suitable your property is for the rental market. It may be that your house is not the kind of place or in the kind of area that people want to rent. So it may be an idea to get the advice of a local lettings agent, who should also be able to advise on any alterations and safety measures you need to undertake to make your house rentable.

As far as taxes go, when you eventually sell the house, because you will have rented it out you are likely to face a capital gains tax bill but allowances will be made for the fact that it used to be your home.

Category: Rent Out Property
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  • Exploring the World of Antique Jewelry
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  • The Future of Nutrition: Technology-Enhanced Eating
  • The Ultimate Kitchen Cleanup Guide for Home Cooks
  • Exploring the World of International Street Food

alternative ways to sell your house buy my house home realtor home sellers house buying companies house realtor houses how do you search by mls number? how to sell your home online how to sell your house by owner how to sell your own house my realtor national association of realtors realtor realtor.com find a home realtor.com florida realtor.com mi realtor.com official site realtor.com rentals realtor.com texas realtor definition realtor homes for sale realtor logo realtor md realtor nc realtor near me realtor net realtor on realtor one realtor pa realtor pronunciation realtors realtor websites sell home by owner sell home for cash sell home online sell home quick selling a house sell my home sell my own home steps to selling a house by owner the realtor the realtors what does a realtor do yahoo real estate listings

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