UK Landlord Forum / Life

Hello Everyone

Just saying hello really.  My wife and I are Jersey residents and already own one UK property which we rent out.  On the verge of retirement now we are looking to acquire a second property, to live in one and rent the other when we do leave the island.  We have been fortunate so far in that our tenants have kept paying and (touch wood) will continue to do so. 

The market is a huge unknown at the moment and so it raises a whole bag of questions.  Is this a good time to buy or is it a good time to be holding cash, bearing in mind zombie interest rates into the medium and long term on ordinary savings accounts.  Neither of us are financial investors or like the idea of putting our hard earned money at risk.

Are there any tax penalties with owning a second UK property?  How are people thinking at the moment going forward?

Any way I look forward to some discussion around the subject.

Z

Property is risk. The only risk-free option is savings accounts spread across various financial institutions to take advantage of the FSCS protection. With the likely looming financial upheaval there will be opportunities I'm sure - but coupled with risk... what's the point of owning property to let if there are no Tenants with jobs you're willing to let to? You'll be scraping the bottom of the barrel before you know it. What if the crisis persists? Government will not be able to support the population in the way it has forever... something will break... and how does Government raise funds? Borrowing and taxation. You can be sure the Government will be coming to Landlords with new and interesting (but always measured and fair, as proven to-date) tax ideas. Why? Easy target.

I personally am waiting until next year to buy the next BTL - i think house prices will drop in the next 6-9 months. Interest rates on savings are indeed terrible. You need to decide is it better to buy now and start generating an income sooner, or will the house prices drop enough to make it worth holding off for. Your decision as an investor.

In the UK - the income generated by rent payment is counted as an income and liable to pay tax on the full rental income. There are no longer allowances on the interest paid on any mortgage (might not affect you anyway, sounds like you have the cash to buy outright). It would be worth discussing formally with a tax advisor on how this would impact you in your specific situation.

For me, further properties will nudge both the wife and I into higher rate of tax, so all of a sudden losing 40% of the rental income to the tax man starts to make less financial sense.