The cost of becoming an accidental landlord is mounting up. If you’re an accidental landlord, you’ve been attacked on three tax fronts by the Conservative Government changes. The first is the Section 24 Tenant Tax change, which means for the 2020-21 tax year you’ll only receive basic rate tax relief for mortgage interest on your rental property. The second hit to your pocket is the additional 3% Stamp Duty (SDLT) you have to pay on each subsequent property you buy whilst owning your investment property. The final tax-nail in the accidental landlord coffin is the planned changes to Capital Gains Tax (CGT). This final change is to the CGT relief on your principle private residence to Capital Gains Tax when you sell your Principle Private Residence (PPR). If you let a property that was once your PPR, any CGT relief will be lost under these new rules.
Selling a house can be stressful and can take months or much longer to sell if sold in the conventional way. Whereas if you sell to an investor, the process is very quick and you’ll sell your house chain free and estate agent commission free. But there’s a catch, as often times you need to be prepared to accept a below market offer. This is the price to pay for the convenience of a quick sale. But how much will an investor pay for my house you may ask? If you want to sell your house fast and for cash; expect to receive between 25% to 30% below its market value. But there are alternative methods to sell your house where you could achieve market value.
Due to the introduction of Section 24 Tax or the Tenant Tax, as of April 2020, you are no longer able to deduct any of your mortgage expenses from rental income to reduce your tax bill. Instead of a deduction from your rental income, you’ll receive a tax-credit. This tax credit is based on 20% of your mortgage interest payments. So whether you’re an accidental landlord or had the intention of buying your rental properties, these Section 24 (also known as Tenant Tax) rules will affect you. How much the rules affect you will depend on the level of rental income you have and how much mortgage interest you pay.
Birddogbot review is for real estate investors looking for a faster way to search out deals and save time. Deal finding in property investing is a real time hungry process. But with Birddogbot software you save time as the software finds the deals for you. This means you spend your time visiting and negotiation the deals instead.
To find out how long a house has been on the market there are a few simple ways. These include asking the estate agent, looking on the internet on Rightmore, Zillow and Zoopla or asking the vendor. As a seller, and if it’s your houses that’s been on the market for a while, you may be at a disadvantage as a stagnant property can become less desirable. But as a buyer you may have an edge when it comes to negotiating the price and terms.
If you’re stuck with the problem of “I can’t sell my house but want to buy another“, you don’t have to sell your house. But if you prefer to sell first, there are a number of options for you. Solutions to sell your house before you buy another include selling to an investor for cash, selling using a lease option or opting to not sell your existing house at all. This would be letting it out to tenants, but beware of the tax implications of this solution.