2018 Property Tax Regulations at a Glance


Tax regulations are never simple to understand, and it’s no different for landlords.

This is why we’ve put together a free, comprehensive guide on everything you need to know - download it here.

In the meantime, here’s an overview of the current property tax regulations.

Stamp Duty

The amount of Stamp Duty Land Tax (SDLT) you have to pay when buying a new property depends on the value of the property, and whether or not you’re buying the property as a second home or buy-to-let.

For residential properties intended as a sole or main home:

Property Value

Rate

Up to £125,000

0%

£125,001 to £250,000

2%

£250,001 to £925,000

5%

£925,001 to £1,500,000

10%

Over £1,500,000

12% 


Note that for first time buyers, there is no SDLT to pay on properties up to £300,000. For properties between £300,001 and £500,000, a rate of 5% will be paid on everything over the first £300,000.

For residential properties intended as a buy-to-let or second home:

Property Value

Rate

Up to £125,000

3%

£125,001 to £250,000

5%

£250,001 to £925,000

8%

£925,001 to £1,500,000

13%

Over £1,500,000

15%

 Check out our Stamp Duty Calculator to find out exactly how much SDLT you’ll have to pay.

Rental income tax rates

You’ll need to complete a self-assessment tax return if you earn between £2,500 and £9,999 after allowable expenses, or £10,000 before allowable expenses. The amount you pay is charged at the same rate as regular income depending on which tax band the income falls into:

Your rental income will be added onto the income you earn from your employment, and you may have to pay a higher rate if your rental income tips your total income over a particular threshold.

Allowable expenses

You can claim back the cost of any incurred allowable expenses against tax. Allowable expenses are any cost incurred wholly and exclusively as a result of letting your property, for example fees for services such as cleaning and gardening, letting agent fees and repair and maintenance work (though not improvements).

You can also claim back some of the interest on your mortgage as an allowable expense.

Examples of expenses that wouldn’t be included are phone calls made to your tenants for the purposes of renting the property, petrol costs for driving to and from the property, and the main (capital) part of your mortgage repayment.

Self-assessment deadlines

If you’re completing a paper self-assessment tax return, the 2018 deadline is 31st October 2018. If you’re doing it online, the deadline will be 31st January 2019.

For a detailed explanation of your tax obligations as a landlord, download our free eBook

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