Is Remortgage interest tax an allowable expense for primary home renovation?

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    Is Remortgage interest tax an allowable expense for primary home renovation?

    Hi, I have a freehold property which is currently on rent.

    Can I remortgage this property for around 50k and use the proceeds to build a back and side extension to my primary house.

    Would I be able to claim back the interest portion of the remortgage payments in my annual self-assessment as expenditure.


    Regards

    Bobby

    #2
    The loan is on the property which is part of your business, so the expense is a business expense.
    What you do with the money isn't an issue for tax purposes.

    A lender may have different views but its not really their business either.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Yes ., You can take out a mortgage your rental property and use the money on your own home.

      Starting next year ( 2017-2018 ) , the Tax Office will not allow you to deduct loan interest ( finance costs ) as an expense from the rental income.

      Instead , the calculation of "annual profit" = "rental income" minus "maintenance expenses" and this profit will be charged at tax rate of 20% or 40% or 45%.= your tax bill.

      But you can claim a reduction of 35% ( 30% in 2nd and 25% in 3rd year) of your loan interest from the calculated tax bill.

      Comment

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