Landlords – Seven Ways to Minimise Your Property Taxes

publication date: Mar 15, 2011
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author/source: Guest Article by Amer Siddiq, Property Tax Portal
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Rented Property Tax


Landlords – Seven Ways to Minimise Your Property Taxes


Minimising taxes is one of the easiest ways to boost your property profits. Here are seven tips to help you:-

  1. Claim Costs as Revenue Expenses
    In the current climate, where possible ensure that expenses are deductible as revenue expenses, as they will minimise your income tax. For example, the cost of replacing single glazed windows with double glazed windows can be claimed as a revenue expense.
  2. Claim ‘ALL’ Property Expenses
    If you have made any expenditure then make sure that you keep a permanent record of it, so it isn’t overlooked when you come to claim it as an expense. It doesn’t matter how small or large the expense is and remember the Tesco strap line...’Every Little Helps’!
  3. Timing Can Be Everything
    Record low interest rates have lead to many more landlords making a profit on their rental income. If this is the case then you could end up with a hefty tax bill even after all your expenses have been paid. So to help minimise your tax burden, consider making some ‘repairs’ in the same tax year to bring down the tax bill.
  4. Avoid Capital Gains Taxes
    If you can, always consider letting out a property that has previously been your main residence. It is the simplest and most effective way to avoid capital gains tax!
  5. Make Sure You Register Any Rental Losses
    If you have made losses in the previous tax years then by registering them with HMRC you will be able to carry them forward indefinitely and offset them against future profits.
  6. Using Your Car for Your Property Business?
    If yes then you will need to apportion the cost of the car between business and private travel each tax year. If your total miles for the year are 12,000, for example, and your property related trips total 2,000 miles, you can claim 2/12 of your car costs e.g. road tax, servicing, insurance, MOT etc.
  7. Switch Property Ownership with Your Spouse if they are Lower Rate Taxpayers
    If you have a spouse who is a lower rate (or even nil rate) taxpayer and you are a higher rate taxpayer, consider moving the greater portion of the property ownership into their name.

 
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