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Many people have rental properties whether it is an investment choice, they have moved and couldn’t sell their original property and decide to rent rather than reduce their resale price, or can’t afford to live in their house any more and move out permanently / temporarily until their financial situation improves.

Income Tax On Rental Income

If you decide to rent a property it is imperative that you declare this rental income to HMRC via your personal tax return whether you make a profit or not.

If your rental property is currently in a loss situation, e.g. your rental income is less than the interest element of your mortgage then it is still important to declare and record the loss, as these losses can be offset against future rental profits for the property.

What rental expenses can be claimed?

The following are legitimate expenses that can be offset against your rental income profit:

  • Mortgage interest (not the capital element)
  • Letting agent fees
  • Repairs and maintenance of the property, e.g. gas checks, decorating
  • Building and contents insurance
  • Services, such as cleaning or gardening
  • Council tax and utilities
  • Accountancy fees
  • Rent, ground rent and services charges
  • Other direct costs of letting the property such as mileage to check on the property, advertising etc.