Mortgage Interest

K

Kramer

Registered User
Messages
135
If I buy a property for cash & subsequently get a mortgage on this property, would I be entitled to offset the rental income against the interest payable, or would the mortgage need to be in place at the outset?
Thanks
 
I suspect (but don't know for sure) that you would need to have the mortgage in place from the outset otherwise you are simply doing an equity release and using the money for some other purposes. And I presume that you mean offsetting the mortgage interest against rental income and not the other way around?
 
As far as I know once you USE the money to either buy a rental property or renovate a rental property you can then offset the mortgage interest against your rental income.

It doesn't matter which property you release the equity from once you can demonstrate that the mortgage was used for purchase or renovation of rent generating property.

I think you do need to get professional advice from a tax advisor. Maybe if you can demonstrate that the cash payment was only a temporary measure until you could get your mortgage in place then revenue may accept your mortgage as an investment mortgage.
 
But the question here is if the investment property is bought for cash and only later on is (re)mortgaged can the interest on the loan be set against rental income. I suspect not on the basis that the property was already bought outright with cash and the (re)mortgage is basically an equity release and no a loan for the purchase of the property. I agree that independent, professional advice is a good idea.
 
Thanks for the replies.
I spoke to my financial advisor on the phone yesterday evening and he advised me that this wouldn't be a problem as the timespan between buying & mortgaging would only be a maximum of a couple of weeks so it would all constitute the one overall transaction.
Cheers
 
FAO Clubman
Multi-Agency Intermediary and Mortgage Intermediary regulated by the Financial Regulator

Quote from website ".......professional and independent advice in relation to pension planning, life and serious illness covers, lump sum investments and mortgages......."
 
Thanks for your concern, mind you having read these pages I was well advised as to what type of advisor I should use.
 
You must log in or register to reply here.
Back
Top