Mortgage interest question

[sburke67]

Hi,

apologies if this has been asked before, but i couldn't find it.

Is it only the interest on a BTL mortgage that can be used to offset against rental income or does a non-BTL mortgage on the property also qualify?

Cheers and TIA.

Sean

[Tax Accountant]

Hi,

apologies if this has been asked before, but i couldn't find it.

Is it only the interest on a BTL mortgage that can be used to offset against rental income or does a non-BTL mortgage on the property also qualify?

Cheers and TIA.

Sean
There is no distinction between properties bought specifically for letting using a BTL mortgage and properties bought with ordinary mortgages which are subsequently introduced into a lettings business.

Therefore, so long as the mortgage is in respect of a property which is currently being let, mortgage interest thereon is allowable regardless of whether this is a BTL mortgage or residential mortgage.

For example, if you have a mortgage on a property used for your own residence or 2nd home, interest is not allowed for tax relief. If you subsequently decide to let the property, any interest on the mortgage becomes eligible for deduction as an expense against the rental income.

I hope this helps.

Ramnik

[sburke67]

I hope this helps.

Ramnik

Hi Ramnik,

yes it has. Thanks for the info.

[Tax Accountant]

Hi Ramnik,

yes it has. Thanks for the info.
You are welcome.
Pay it forward.

Ramnik

[propman2]

On a similar theme, I thought you could set interest on the part of mortgage on your own residence, which you raised through remortgage etc and provided you used this money to purchase a buy to let, against income on that buy to let.

At the end of the day it should not matter where the loan money to buy an investment property comes from and therefore the interest from it can be set against the income from that property.

Any views?

[Tax Accountant]

On a similar theme, I thought you could set interest on the part of mortgage on your own residence, which you raised through remortgage etc and provided you used this money to purchase a buy to let, against income on that buy to let.

At the end of the day it should not matter where the loan money to buy an investment property comes from and therefore the interest from it can be set against the income from that property.

Any views?

Yes, you could do this provided the loan is used for your lettings business.

In some circumstances, you could also raise money for personal purposes, secured on the buy to let property, and still get tax relief thereon, not withstanding that the money has been used for personal purposes.

I have brought back into play another thread on this subject; please refer to it for full details.

Ramnik