If you were hoping the dismal interest rates offered by banks right now would see a rise in the near future, you’re probably more optimistic than most people. With the uncertainty of Brexit, many individuals with money languishing in banks will be tempted by the somewhat higher interest earnings of investing in property.
Franklin D Roosevelt once said that real estate is the safest investment in the world. Closer to home, Andrew Carnegie claimed that 90 percent of all millionaires become that way through owning real estate. Before we look at property inventory software, let’s start with the rules.
Stamp Duties Changes
Assuming you already own the property you’re living in, a second property you purchase for buy-to-let purposes will be subjected to a 3% basic stamp duty, regardless of the price. In England and Northern Ireland, you will now only have 14 days in which to file a Stamp Duty Land Tax (SDLT) Return and pay the taxes. If the property is in Wales or Scotland, the period for filing and paying SDLT remains at 30 days.
Income Tax Changes
Unless you are cash rich and can afford to pay your entire buy-to-let residential property cost up front, mortgage interest payments are still deductible against rental income, but only up to 25%. This rule will only be effective until April 2020. In addition, you could also claim a 20% tax credit against the total income tax you pay on the rest of the 75%. From April 2020, no deductions of mortgage interest payments will be allowed against your rental income. However, you’ll then get 20% tax credit against 100% of your rental income. Use the HMRC tax relief calculator more accurate results.
Tools to assist in your portfolio
Your first acquisition of a buy-to-let property may not be your last, and property inventory software would greatly assist in the management of your list. A proper recording system which businesses would use property inventory software with ensures you start right. Managing tenants, check-ins and check-outs, inventories, inspections, expenses, and rental income will all be systematically recorded.
Keeping on top of your investments when it comes to landlord tax legislation and maintaining proper records will make you a responsible landlord, thus fulfilling all obligations toward tenants and taxes. After all, making money should be stress-free.