I currently have 5 properties, 1 of which is my home. My tax liability on the total rental income after mortgage interest, service charge etc….is 6,000 a year. The loans are all fixed for 2 years at 3.29%, so the 6,000 per year tax will remain approximately the same for 2 years. I am considering a section 23 property at 190,000 (stamp is 5,700 at 3%). I would guess that the premium on this property, because its section 23 is approx. 30,000. I know that the full allowance for section 23 was extended till the end of this year and I am concerned that if I delay purchasing this or a similar property that closer to the deadline, the premium on these tax incentive properties will spiral up. I have calculated that the rent will just about cover the interest only mortgage after service charge. So is it worth the premium for this section 23 property?
Thanks !!!!