soho_blue
15-03-2006, 12:07 PM
my wife and i bought a flat in March 2002 for £109k and lived there for 3 years. It is now worth about £180k. In March 2005 i bought a family home and started to rent out flat. The mortgage repayments on the flat are about £600/month and i recieve, after agent fees / tax, about £680/month.
My long term plan is to rent out the flat until the mortgage is paid off then either sell it or continue to rent it (basically use it as a pension).
To me this seems a good idea as, whilst i dont really make any money on the place every month it will eventually provide me with an income to which i have not had to pay anything into.
Someone advised me that i should sell the flat when CGT becomes an issue and invest the approx £70k profit into something else - like a 'normal' pension. To me this doesnt make sense but im in no way a financial expert. So, any ideas if im missing something ??.
One further thing, am i right in thinking that CGT is payable on the profit you made on the property from the date you moved out - i.e if the value of the place in 2005 was £180k and in 10 years time it worth £200k you would pay 40% on 20k ?? Also, how do you prove the value when you started renting it out. All i have is a written valuation from our agent.
Many Thanks.
My long term plan is to rent out the flat until the mortgage is paid off then either sell it or continue to rent it (basically use it as a pension).
To me this seems a good idea as, whilst i dont really make any money on the place every month it will eventually provide me with an income to which i have not had to pay anything into.
Someone advised me that i should sell the flat when CGT becomes an issue and invest the approx £70k profit into something else - like a 'normal' pension. To me this doesnt make sense but im in no way a financial expert. So, any ideas if im missing something ??.
One further thing, am i right in thinking that CGT is payable on the profit you made on the property from the date you moved out - i.e if the value of the place in 2005 was £180k and in 10 years time it worth £200k you would pay 40% on 20k ?? Also, how do you prove the value when you started renting it out. All i have is a written valuation from our agent.
Many Thanks.