Split a property, how much tax do I pay?

[Gordon999]

Due to Council of Mortgage Lenders' policy, you should be aware mortgage loans are not usually offered on "freehold flats" or "leasehold flats" falling below 70 years. So almost all flats in E&W are registered under leasehold title .
As well as getting planning consent from Local Council, you need to check with your mortgage lender on getting consent to split the property and the max loans available on BTL mortgages. This may only be up to 70% for BTL mortgages. You are lucky to get a 90% mortgage.

[Telometer]

Not if they're flats, if I have understood you properly. If you make them into semi-detached houses, then yes you can.

[BuildersMate]

Thanks for the response.

On point 2 below, given that the two flats will have separate boundaries (as in the property grounds will be be split so each has it's own garden and drive way, fenced off and all), separate external entrances, separate utility supplies and driveways, would I be able to have them registered as freehold?

[Telometer]

1. Yes, obviously!

2. Talk to your bank. You may find it difficult as the two properties will be held together and you cannot grant a lease to yourself.

[BuildersMate]

Hello,

I'm a budding property developer and have a question I hope you guys can help with.

I've bought a bungalow with a 90% mortgage. It's detatched and has lots of space. I want to add a second storey on top and thus make it into two separate flats, separate entrances, utilities, addresses etc etc.

If I get planning permission and do this and rent them both out, I've got two questions:

1. The rental income from both flats would cover my repayment mortgage and there will be a small profit - would I need to pay tax on this?

2. Will I be able to transfer the mortgage onto one of the flats?

Thanks!