Mortgage tax relief

[kenlee]

If I purchase a property via a Residential mortgage on that property rather than BTL but do indeed let it out, am I still able to offset my rental income with the mortgage interest payments for tax relief?Thx.

[TaxationPete]

The proposed use of the property has to be declared to the provider. To raise a residential mortgage and then let the property with permission is a material change of fact and the provider can foreclose on you, charge you penalties and you loose your property. HMRC do not mind which it is, a residential mortgage attracts lower interest so more profit for you and more income tax to HMRC. Many property owners that rent out their ex home have permission form the provider to let the property and the residential mortgage remains in place. Lately they have not been as relaxed on this unless the rental is for a limited period due perhaps to the owner working away for a couple of years. Some owners retain the providers property insurance and it you let the property it is also not vlaid and a claim exposed this, so you could fine yourself with invalid insurance, and a foreclosure.
Read this :
http://www.landlordzone.co.uk/forums/showthread.php?t=17001
Regards Peter

[King_Maker]

The short answer is Yes, for HMRC purposes.

[kenlee]

Many thanks

[Pobinr]

The proposed use of the property has to be declared to the provider. To raise a residential mortgage and then let the property with permission is a material change of fact and the provider can foreclose on you, charge you penalties and you loose your property. HMRC do not mind which it is, a residential mortgage attracts lower interest so more profit for you and more income tax to HMRC. Many property owners that rent out their ex home have permission form the provider to let the property and the residential mortgage remains in place. Lately they have not been as relaxed on this unless the rental is for a limited period due perhaps to the owner working away for a couple of years. Some owners retain the providers property insurance and it you let the property it is also not vlaid and a claim exposed this, so you could fine yourself with invalid insurance, and a foreclosure.
Read this :
http://www.landlordzone.co.uk/forums/showthread.php?t=17001
Regards PeterWhether you have permission from the provider of the mortgage is irrelevant. Yes you can claim the interest as a financial expense no matter what kind of mortgage you have on the property you let out. I know from experience.

[TaxationPete]

I did not say it was not deductible. As far as HMRC are concerned you have lower interest mortgage so you deduct less and they tax your higher profit to fill their coffers. However a false declaration of obtaining finance or making material changes without the providers permission is a no, no, and can lead to prosecutuion and foreclosure of your loan and considerable closure penalties and loss of the property. I suggest you read my reply and link more carefully. Regards Peter