Renting out our 1st home

D

Derekom

Guest
Hello There,

We currently have our house up for sale, we have interest and viewings but no offers, we are on a good value tracker mortgage and have looked it at renting the property so we can buy our new house, I have met with rental agencies and we can more than cover our mortgage.

Would anyone be able to tell me what are the tax implications for renting your 1st home and buying a 2nd ?
 
Unless you're buying with cash you should probably look into getting a second mortgage before considering tax implications. I suspect the answer will be no unless you have extraordinary circumstances.
 
Derekom said:
Hello There,

We currently have our house up for sale, we have interest and viewings but no offers, we are on a good value tracker mortgage and have looked it at renting the property so we can buy our new house, I have met with rental agencies and we can more than cover our mortgage.

Would anyone be able to tell me what are the tax implications for renting your 1st home and buying a 2nd ?
Click to expand...

Apart from tax issue would they be issue with bank turning mortgage from residential to investment, would you loose tracker?

tax view-

1.Link below look at principal private residence relief- The house could become liable to part capital gain tax

Download leaflet and read
[broken link removed]

2.Pay tax on any profits and if lower tax band used be at the higher rate

3. register it with appropiate authority, and property property tax

4. Interest deduction resticted to 75% against tax

5. Loss of Trs on mortgage payments

6. tax return has to be filed each year

The above are general and others might expand or correct if I am incorrect on any
 
Magpie said:
You can't keep your tracker if you rent it out.
Click to expand...

While this is more than likely the case (and OP should be made aware of it), unless you have read the terms and conditions of the OP's mortgage, you can't actually confirm this.

There was a post in the investment section of AAM within the last 2 weeks where a poster stated that he informed the bank that he would be renting out his PPR and he was allowed keep the tracker. His terms & conditions merely stated that he had to inform the bank of the change of use of the property.

Here's the thread

http://www.askaboutmoney.com/showthread.php?t=145316
 
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