Simple Accidental Landlord Question...

[andybiochem]

Hi,

I became an accidental landlord in 2009 after failing to sell my home, but having to move 100 miles away for job reasons.

I was unable to get a Buy to Let mortgage because the LTV just wasn't there, but my mortgage company agreed to allow tenants under the current mortgage product (at a premium, and at their base rate).

Can I claim tax relief on the interest paid on the mortgage since 2009, even though the mortgage was not specifically sought to be used as an investment loan?

Thank you,
Andy

[TaxationPete]

Yes you can claim the interest from the date on the first tenant. I suggest you buy a couple of books on the subject of Buy to Lets. Regards Peter

[Telometer]

Yes you can claim the interest from the date on the first tenant.

In fact, you should be able to claim it from the date when the property was first both available to let and advertised thus. Normal trading principles apply, not old Schedule A rules dating back to the last century.

[andybiochem]

Thanks a lot guys!

I was aware of the tax relief on investment mortgages, i.e. if you take out a B2L, or re-mortgage to fund a property principally to generate income, I was just unsure whether that extended to existing mortgages on property that then becomes tenanted.

Really not happy being a landlord in this way, and I make a loss of 200 quid per month covering the mortgage. I had to make some quick decisions before moving, and went with the easiest letting option, but also the lowest returns. Hoping to finally get rid of it in March.

I've asked the mortgage company for a certificate of interest paid over the year, now waiting for it to arrive. Is there a simple formula I can use to estimate the insurance costs in the meantime?

Thanks again!

[Telometer]

Insurance costs should be pro-rated over the year. e.g. £1,000 for the year, let for 3 of 12 months, allowable cost £250.

[andybiochem]

Oops, i didnt mean to type 'insurance'; I meant to type 'interest'.

I.e. Is there a way to calculate mortgage interest paid over the year? My rate has been consistent throughout the year, which might make it easier.

Thanks for your reply anyway!

[Telometer]

Ask the mortgage company.