It wasn’t too long ago when the government enraged landlords everywhere by announcing that they could no longer claim tax relief on their mortgages. In essence, the policy once treated landlords as a one-person business and their mortgage as an expense, meaning the money they spent on it became tax exempt.
Unfortunately, this is now being phased out.
While mortgages are no longer considered as a legitimate landlord expense, there are still plenty of other expenses that you can claim off your tax bill. Ensuring that you take care to properly document and make the most of these tax exemptions, this could make a big difference to your overall tax bill at the end of the year.
Examples of things you can claim back off your tax bill include:
These all come with their own terms and loopholes, so it’s important to make sure you’re well versed on each individual expense before filing your tax bill. If not, you may well end up paying much more than you expected.
Finding a good accountant can help you to improve your profit margin as well as saving you considerable time and administration when it comes to properly documenting, compiling and filing your tax return.
Maintaining the building and furniture within it can often be one of the most expensive costs for a landlord. Landlords are legally responsible for the quality of the interior and exterior of the building. However, when it comes to costs incurred from fixing or replacing items that have undergone what is considered as ‘fair wear and tear’, this can be claimed back in tax relief.
If furniture wears down over time, this can become a considerable expense for landlords who are responsible for arranging for a replacement, as well as any unforeseen work that needs to be done on the exterior of the building, which can also rack-up expenses. Understanding that you can claim as much of this back in tax relief as possible is an important way to reduce the impact of these financial blows.
Remember, you can’t claim tax exemptions for any renovations or extensions that might add value to the property, but you can claim for any necessary repairs to the exterior of the building that may arise.
When buying replacement furniture, you can generally claim back the exact price of the new item. But in most cases, this will have to be a like for like replacement of the original item. You can also claim wear and tear maintenance costs of up to 10 per cent of the annual rent.
One of the other big costs that landlords typically pay is fees for high street letting agents who assist with property maintenance and finding tenants. Luckily, these days there is an alternative – online letting agents like LetBritain allow landlords to take control and avoid hefty unnecessary landlord agency fees.
Discover more about our online letting agents for landlord services right here.