Tax question: Claiming back house repair work?

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    #1

    Tax question: Claiming back house repair work?

    Hi

    I have posted this in the tax section to clarify some rough figures and ask the question about claiming back house repair expenses.

    I have just bought a property for 72k, and it will achieve £500/550 (for simplicity lets say £500) pcm rent. It is in pretty good order but needs a bit of work that would cost 3k. This would all consequently give me about 8% rental yield off a relatively low value property.

    My 1st question is can I claim back the 3k for my expenses? along with soliciting, agency fees etc?

    The BTL mortgage is 200pcm so that would be £2400 that I could claim back and with agency fees of 10% that would effectively total my years rent being 6k (including the 3k of work done).

    Would this mean I would not be liable to pay any tax this year? assuming my figures and assumptions are correct?

    Thanks
    Tags: None
    #2
    The costs of acquisition are deductable form the capital when you dispose of the property not revenue. Only the inferest on the mortgage is deductible not any capital repayments. Agency fees are deductible afaint eh rental income. What work is required. Is it capital in nature or revenue like decorating. Regards Peter

    Comment

      #3
      Originally posted by TaxationPete View Post
      What work is required. Is it capital in nature or revenue like decorating.
      New carpets, plastering and a general face lift basically.

      Comment

        #4
        http://www.taxationweb.co.uk/forum/d...rTSvCwY5GAC.99
        Will help you. Regards Peter

        Comment

          #5
          thanks Peter, thats very helpful.

          I have 1 more theoretical question that revolves around building up your property portfolio.
          Here it goes...

          If I took out a 20k loan (with tesco for example) over 5 years at £350 pcm, and then bought a property for 80k with £550 pcm rent, with a 60k mortgage at £200 pcm mortgage cost.

          Is the tesco loan tax deductable? regardless of being highly leveraged, making a loss for 5years and all the other risks associated.

          Comment

            #6
            Yes, there is no reason why the Tesco loan is not tax deductible as it's the purpose which is important.

            Portfolio building is often better via a limited company - if the investor is a higher rate payer and rental losses are envisaged.

            Comment

              #7
              Originally posted by BlueCross View Post
              Hi

              My 1st question is can I claim back the 3k for my expenses? along with soliciting,
              Thanks
              I don't think soliciting fees are tax deductable

              Comment

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