What can you offset against tax if you rent out property?
If you own buy to let property, you can offset certain expenses against tax. Which ones?
If you rent out a property you’re likely to have to pay tax on the income you receive. But you can reduce your tax bill – legally – by offsetting certain expenses related to renting out your property against your tax bill. Not all expenses are allowed under HM Revenue and Customs rules, so it’s important you understand the rules.
The government has changed the tax rules on furnished holiday homes which mean you’ll have to let it out for longer.
You can get tax relief if you rent out a furnished holiday home in the UK or Europe, but the rules are about to be tightened up, making it harder to qualify.
If you own a holiday home in the UK or Europe (it actually extends to any property in the European Economic Area) you’re able to claim tax relief on your costs, which means you can deduct costs from the rental income you receive before you pay tax. But the government tightened up the rules from April 6th 2011, with an increase in the number of days that you have to rent out your property in order for it to qualify for tax relief and restrictions in how you can offset losses you make.
Inviting a stranger to live in your home is a big undertaking and shouldn't be done lightly (even if they are helping you pay your mortgage). However, with a little preparation and some common sense, it can be a great way to make a little extra money. In this article we'll look at the things you should consider before taking in a lodger to make sure you (and your room) are fully prepared.