tax on property rental

[old-wos-is-name]

Hi All,

If I were to let a property, for £600 per month, and there was a mortgage on it for roughly the same amount, would tax be payable? is the rent classed as taxable income?
Thanks.

[boxtops]

Admittedly this was 15 years ago but I did this for a while - the income/rent was the same amount as my mortgage. I didn't have to pay tax on it.

[SeaJayPea]

If I've got this right, the rent is classed as taxable income, but the interest part of the mortgage repayment is tax deductible. Also any repairs that you do to the property are as well. It would be worth talking to an accountant. Good luck with it.

[ubasses]

yes unless it was all interest.

[Buenchico]

As SeaJayPea indicates, expenses can be deducted from the income (when calculating the tax liability) as long as they're not 'of a capital nature'. So the interest element of the mortgage payments is deductible, but not the capital part:
http://www.landlordzo...on-of-property-income

Chris

[old-wos-is-name]

So its better to have an interest only mortgage? ( mind you, the capital part of the payment is probably almost nothing).
Thanks.

[Graham-W]

SeaJayPea. As I understand it, repairs to the structure are not tax deductable as the could be classed as improvements.
They would however be deductable against Capital Gains Tax if the property were ever sold.

[bushbaby_de]

If the mortgage was the same value as the rent I doubt your mortgage company would give you permission to rent out the property.

[237SJ]

My mortgage company was perfectly happy that my mortgage was the same as the rent. As long as they got their payment every month, they didn`t care.

[bushbaby_de]

Wow you have a good mortage then cos ours wanted the rent to be at least 125% of the mortgage.