Best to ask an accountant. I’m not sure about self-assessment but I once had a significant business expense which I forgot about for 3 years and was able to set it off from my company tax.
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[Finance] Buy to Let Mortgages
- Thread starter Renegade1
- Start date
Best to ask an accountant. I’m not sure about self-assessment but I once had a significant business expense which I forgot about for 3 years and was able to set it off from my company tax.
I’m surprised that the lease is so much.
Whilst on the subject of leases and freeholds can anyone recommend a surveyor in Brighton to value a freehold price? I’ve been quoted 900 which seems a bit steep.
- Thread starter
- #224
And where does's the mortage come from?If the rent is £1000 per month and you can borrow 4 x that which is only 48K.
mikeyjh
Well-known member
Your post hits (and your next one) upon an important point - That all the advice shared here is useful, but only in the context of one's personal circumstances. Anyone claiming that one particular way is better than another is giving poor advice as you simply cannot do that without a clear understanding of personal circumstances.
For example, I see you you're going down the interest only route which clearly suits your own needs whereas I own mine, which is perfect for me
It is not worked out like that
- Thread starter
- #227
How is it worked out? I assume on your overall earnings but if they have gone towards a mortgage/mortgages on other properties......?
Loan to value ratios, then ability from the rental income to service the debt?
Buy to lets are based on the rental income, stated in the thread and examples given, however most lenders require a minimum personal income of £ 25k pa to show the mortgage could still be paid if their was a problem with the rental payments
Get in 
Thank you Uncle!As explained above, it's not worked out like that.
4 times your personal income is used for you home, because you also have to use your income to pay for everything else in life - council tax, gas/elec, water, food, car, clothes, etc etc. With a rental property, the rental income has to cover the mortgage and it doesn't need to do much more than that. So companies used to ask for rental income to cover 125% of the mortgage, allowing for interest rate rises. The last btl I bought cost 325k, and I got a 275k mortgage for it.
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Would that leave you with an official valuation that the parties are somewhat tied to? It does sound a lot, hopefully someone can recommend better. Doesn't Uncle S know people that do this sort of thing?
Beach Seagull
New member
- Jan 2, 2010
- 1,310
If say for example without any rental income you are a basic rate tax payer, but with rental income it pushes you into the higher rate (40%) would you're salary start to be be taxed at 40% or would you're salary still be taxed at 20% but the rental income at 40%.
It's seen by Hmrc as all one income . Worth loading up on your pension to keep taxable pay in 20%
The latter is true - your salary would still receive the full personal income tax allowance, so your net pay wouldn't fall.
Beach Seagull
New member
- Jan 2, 2010
- 1,310
Thanks for this although the reply above from Dale Jasper contradicts this?
I'm correct on this. I'm not sure if he's wrong or not? But he made a separate valid point, about if you can afford to, some would advise upping payments into your pension scheme, to reduce the slice of income taxed at 40%. Many choose to as they need the income or aren't into pension saving ... e.g. BTL's is an alternative.
Not necessarily, it's just how it's collected. HMRC look at the total, and you get taxed accordingly. Westander is just saying you keep getting paid as now, and then get taxed at 40% on the rental income. It's the same total as if you paid 20% on the rental and 40% on that part of your salary.
All that changes is how it gets to you and when you pay the tax (PAYE & self assessment).
Isn't Dale an accountant?
Well, the freeholder has offered us the freehold and suggested the price will be halfway between their estimate and ours as a starting point for negotiations. I’ll only pay what I think it’s worth..
If you just want an estimate, then just use a free online calculator and go from there.
https://www.freeholdcalculator.com/freehold_choose.php