Several Tax Changes In 2019 To Affect Buy-To-Let Property


Buy-to-let landlords in the UK will have to deal with new tax regulations, and some of these changes refer to the private residence and tax relief on their mortgage interest payments.

If you plan to buy a property in London, you should scout the market by consulting a professional whether they are real estate agents in Canary Wharf or other districts. The location will be an essential factor to determine the viability of your investment, as landlords should be more attentive to rental yield growth than a higher capital.

In anticipation of filing your taxes as an independent contractor, you’ll want to gather the following documents, at a minimum: W-2, 1099 forms, Copies of invoices and expenses, Receipts for business expenses, Bank statements, Home office records, Records of estimated taxes paid, etc.

Owner-Occupier Landlords

Real Estate Agents In Canary Wharf

Landlords who live in a property with tenants don’t have to pay capital gains tax when they stayed in the property once they decide to sell it. The exemption will apply for another 18 months after a landlord moves out, but the new private residence relief rules will shorten the allotted time to nine months by April 2020.

In other words, you should start reviewing your options for selling your property before the effective date. The UK government also increased the capital gains tax allowance from £11,700 to £12,000, which means that your non-taxable income will be higher upon a resale. However, take note that you will no longer be eligible for a £40,000 lettings relief once you leave the primary residence you share with renters.

How Other Regulations Have Changed

Some landlords have started a limited company when buying a rental property due to the scheduled phase-out of tax relief for mortgage payments. The available rate for 2017-2018 reached 75 percent before becoming 25 percent for 2019-2020. Next year, it will become zero, so landlords take advantage of the 19 percent corporate tax rate since they bought real estate through a limited company.

If they acquired it as an individual, their tax rate would fall under the 28 percent higher and additional taxpayers. Don’t forget that a letting ban by June 1 will prohibit agents and landlords from charging fees related to the letting process. Since last month, the government began to require private-sector agents in England to enlist a new scheme that protects landlords’ and tenants’ deposit amounts.

Where Rents Are Increasing

Property Tax Rules In London

The landscape for rental yield growth also changed at the same time that regulations have become different. If you’re more particularly about rental growth, it’s better to buy a property in Holloway where annual average rates for a two-bedroom unit rose 22 percent to £2,126 in February year over year. Other great spots include Camden, Kennington, Muswell Hill, and Southwark.

Choose the market in Kennington if you want a higher chance of attracting more tenants. The place has been the top destination for renters, while it’s also a cheaper place for landlords to buy a common property.

It can be tedious to review the scheduled updates on the tax schemes and regulations for buy-to-let landlords, aside from hunting for the best place to buy a property. It would help if you considered seeking help from a real estate agent to make it easier to reach an informed decision.

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Himanshu Shah is the chief marketing officer at MyDecorative.Com, and he is also a young enthusiastic writer who is gumptious and talented. He has sound analytical and technical skills. He is a blogger, Digital Marketing Expert who likes to write on home decor.


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