Landlord tax considerations

Published on: 16th February 2017

In 2016 the government introduced a number of disadvantageous changes to the tax that landlords pay and can claim back.

Stamp Duty Land Tax (SDLT)

You pay stamp duty on the purchase of any residential property costing more than £125,000. The amount you pay is dependent on the property value, as you pay different rates for each ‘portion’ of the property cost, this is outlined in the table below.

Table Stamp Duty Tax

Last April the government introduced an additional tax on any property owner purchasing a second residential property. On top of the rates outlined above, anyone purchasing an additional residential property for £40,000 or more must pay an additional 3% stamp duty.

Capital Gains Tax

It is likely that landlords will have to pay Capital Gains Tax on any profits that they make when selling a property that is not their home. Over the pastdecade there have been a number of changes to the ways in which Capital Gains Tax is paid and presently the rate applicable to gains made on the sale of the property is 28%. This tax is payable regardless of whether or not a landlord plans to reinvest the profits into future properties.

Restriction of allowable costs

All landlords with residential property inside or outside the UK can claim tax relief for costs such as mortgage interest incurred on the property they let. Currently the relief is set at 40% and 45%.

Wear and tear allowance

If you let fully furnished properties, you used to be able to claim a wear and tear allowance of 10% of the net rent you receive. This is intended to cover any items that would normally be provided in unfurnished accommodation, including fridges, carpets and curtains etc. In April 2016 this allowance was adapted so that all landlords of residential housing can deduct the costs they actually incur on replacing furnishings. The relief will be applied for the cost of a like-for-like, or nearest modern equivalent, plus any costs incurred in disposing of the old item, or less any proceeds received for the asset being replaced.

If you have any questions about the tax changes above then please contact our residential sales and letting specialist, Diana Warr.

Contact Us

Residential Agency

If you want to request a repair to your property then please click here. Sanderson Weatherall's residential division, based in our Leeds office, offers a bespoke service to clients looking for quality residential property in the North of England. We specialise in all types of property transaction, from large scale development opportunities to individual residential sales and lettings, including first class country and city centre residences. From all offices we offer detailed and specialist advice on residential property requirements to both private and public clients. Our services run from initial feasibility studies, through planning and design, right through to maintenance and regeneration. With a wide range of residential services on offer and with a wealth of expertise in many residential property transactions we have the all the relevant experience to ensure our residential services are as effective as possible. We take pride in our expertise, strong regional coverage, integrity, professionalism and discretion. Fees Fees to Landlords - click to download

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If you want to request a repair to your property then please click here.

Sanderson Weatherall's residential division, based in our Leeds office, offers a bespoke service to clients looking for quality residential property in the North of England.

We specialise in all types of property transaction, from large scale development opportunities to individual residential sales and lettings, including first class country and city centre residences.

From all offices we offer detailed and specialist advice on residential property requirements to both private and public clients. Our services run from initial feasibility studies, through planning and design, right through to maintenance and regeneration.

With a wide range of residential services on offer and with a wealth of expertise in many residential property transactions we have the all the relevant experience to ensure our residential services are as effective as possible.

We take pride in our expertise, strong regional coverage, integrity, professionalism and discretion.

Fees

Fees to Landlords - click to download

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