Are you finding property taxes complicated?

If you’re a new landlord in Leeds, you may find property taxes complicated and overwhelming. At Lota Properties Ltd, we are ready to give you some expert advice to help you better understand your obligations.

Adding Income From Property To Other Income

There’s a common misconception that any rental income you earn from your rental property in Leeds will be taxed separately from your other income from shares or employment.

However, that isn’t the case. While your property expenses and income are recorded in a separate area of the Self-Assessment form, your profit is added to your other income to work out your total tax bill.

For that reason, it’s always sensible to calculate your likely property expenditure and income figures annually before investing in property. That will enable you to check whether your profit will likely take you into the next income tax bracket.

Another thing to remember is that additional income you receive from the property may mean you can no longer receive benefits such as tax credits or child benefits.

Recording Your Expenses

When completing a tax return, you should remember that some allowable costs can be deducted from the income you receive from your rental profit to reach your taxable profit amount. However, renting out your property and the money you spend on it are split between two categories.

You can offset “Revenue Expenditure” against the income you receive from your rental property. These expenses must have been exclusively incurred to earn rental income, for example:

• Maintenance services like gardening or cleaning
• Business administration costs
• Repairs and redecoration
• Insurance
• Fees for any professional services (e.g. an accountant or lettings agent).

“Capital Expenditure”, on the other hand, is subtracted from your capital gains when you decide to dispose of your property. Those are things which increase the property’s value, for example:

• Adding an extension.
• Upgrading the kitchen.
• Carrying out major renovations.

Of course, some works include both expenditures, making recording expenses more complicated. Therefore, it’s wise to use an accountant’s services.

Higher Capital Gains Tax

Although tax is levied at 10% (at basic rate) or 20% (at higher rate) on your chargeable gains on your other financial assets, tax on gains from residential property is levied at 18% or 28%, depending on your tax band.

You need to factor this in when planning the exit strategy for your property investment.

Capital gains tax is levied on the difference between your property’s original purchase and sale prices, with allowable deductions and personal allowances subtracted. It isn’t charged on how much equity you have remaining.

Therefore, if you decide to remortgage the property at some point to release capital, you should always ensure you have sufficient equity remaining to cover your CGT bill should you suddenly need to sell.

Need Help With your Property Taxes?

Handling the financial side of your rental property can be a challenge, but you can rely on our expert team at Lota Properties Ltd to simplify the day-to-day management of your property. As experts in the Leeds rental market, we make it easy for local landlords to maximise their investment.

Frequently Asked Questions About Property Taxes for Landlords

1. Do I pay income tax on my rental income?

Yes, rental income is considered taxable income in the UK. You’ll need to report your rental income and expenses on your self-assessment tax return.

2. Can I deduct all my property expenses from my rental income?

Not all expenses are deductible. You can generally deduct “revenue expenditure,” such as maintenance costs and insurance, but not “capital expenditure,” such as the cost of a new kitchen.

3. Do I pay Capital Gains Tax (CGT) when I sell my rental property?

Yes, you’ll usually have to pay CGT when you sell a property. The tax rate depends on your income tax band and whether you own the property jointly.

4. How can I minimise my property tax bill?

To minimise your property tax bill, ensure you’re claiming all allowable expenses, consider using a tax-efficient mortgage, and seek professional advice from an accountant.

Call us today on 0113 2498010 to learn more.

If you’re looking to sell your house in Leeds, the chances are you’ll want to do it pretty swiftly, especially if you’ve already got one eye on your next property.

Selling up can be a lengthy process at the best of times, so you don’t want to give buyers any extra reasons to delay the purchase.

Unfortunately, without realising it, you may be making your property harder to sell. So, with this in mind, here are five things that make your house harder to sell, along with the solutions so that you can sell your house faster!

The Problem: Too Much Clutter

There’s a fine line between a house that’s ‘lived in’ and loved and one that’s a complete mess! While potential buyers are unlikely to be put off by a few magazines on the coffee table, having a living room that’s sprawling with toys and games all over the floor or an understairs cupboard stuffed to the brim won’t give potential buyers a good first impression.

The Solution:

To avoid this issue, use your house move as an opportunity to declutter. You can list some items on an online auction site such as eBay to make some extra cash and use it to furnish your new home, or simply donate some of your old belongings to a local charity shop.

And if you decide that you can’t let any of your belongings go, then just make sure the house is tidy and well-presented before any viewings. Put away anything that’s making the house look untidy, either in storage or neatly in a garage, shed or cupboard.

Lastly, although it’s a good idea to declutter, don’t fall into the trap of removing all your personal items. Viewers will want to imagine themselves living in the property, so seeing a few family pictures and keepsakes around the house is more likely to leave a positive impression than a completely generic house with no personality.

The Problem: Poor Maintenance

It’s easy to put off odd jobs until they become absolute priorities, like replacing a missing lightbulb, fixing a broken fence, or getting the boiler serviced annually.

However, when it comes to selling your property, these are all things that potential buyers will notice and ask questions about. Therefore, it’s worth spending just a little bit of time and money to bring everything up to scratch.

The majority of buyers are looking for a home they can move into straight away, without having to make major changes immediately, such as getting a new boiler or having a new fence installed.

The Solution:

Before your estate agent books any viewings, make sure that everything is ship-shape and in good working order. Get your boiler serviced, check your taps, showers and central heating. Give your garden the once over and don’t forget to clear debris from gutters.

The Problem: Bad Odours

Most homes have a certain smell to them and in most cases it’s very unlikely to put visitors off, however if you’re a heavy smoker, cook pungent foods or have pets that cause a strong smell in your house, then this can be off-putting.

The Solution:

The simplest solution to this problem is to make sure the house is clean and well aired before any viewings.

Make sure you’ve cleared up any pet droppings and leave windows open to allow fresh air in. A scented candle lit for half an hour before viewings will also help to remove any strong odours.

The Problem: It’s overpriced

It’s perfectly understandable that you want to achieve the highest possible price for your house, but it’s important to be realistic too.

A good estate agent will be able to give you the price range that you should be looking for, but bear in mind if your house isn’t selling, you may need to accept an offer closer to the lower end of that range than the top.

The Solution:

In order to get the full asking price or as close to it as possible, make sure your house is well maintained and everything is in good working order.

A faulty boiler or peeling paint on the walls can unwittingly encourage buyers to put in a much lower offer than you’re looking for, so getting a few small jobs done, such as an annual boiler service and giving the walls a fresh lick of paint could make a big difference when it comes to getting your asking price.

You should be prepared to be flexible on the asking price, particularly if you’re looking for a quick sale, and be realistic about how much you’re willing to accept.

The Problem: Poor ‘kerb appeal’

Kerb appeal is essentially the first thing a potential buyer sees when they look at your property from the outside, so as with everything in this list, first impressions count.

If you’ve got an overgrown front garden and dirty wheelie bins permanently on display, it could deter some buyers before they even set foot inside.

The Solution:

As a bare minimum, make sure your wheelie bins are clean and tucked away, any weeds have been dug up, and grass has been cut.

And you can even go a step further, by adding some hanging baskets or pot plants. Be creative.

For no obligation advice on buying or selling your home in Leeds please contact our expert property team at Lota Properties Ltd on 0113 2498010. We look forward to assisting you.

October 2024

October brought cooler, rather wet weather and a range of new developments across the UK property market. As mortgage rates adjust, demand for rental properties remains high, and upcoming regulations loom, there’s plenty for buyers, sellers, landlords, and renters to consider. And, with Halloween on the horizon, we’ve included some fun, seasonal tips to make this month’s property update a little more festive.

Market Opportunities for Savvy Buyers

For buyers, there are reasons for optimism. While affordability remains a concern, mortgage rates have slightly improved, giving prospective buyers a chance to secure better deals. Nationwide reports that the average UK house price is currently around £262,000, so this could be a good time to step into the market if you’re prepared.

Tips for Buyers:

• Consider Homes with Potential: With more properties in Leeds coming to the market, exploring those in need of minor updates can be a smart move. You may find a home at a lower price that you can add your personal touch to.
• Take Advantage of First-Time Buyer Schemes: Schemes like the Lifetime ISA or Shared Ownership are still widely available and can make a big difference in affordability.
• Look for Eager Sellers: As the year draws to a close, some sellers may be motivated to secure a deal, so a little bit of negotiation could go a long way.

And for some Halloween fun, take a drive through local neighbourhoods to see which ones embrace the season! It’s a great way to get a feel for the community vibe!

Take a look at our current properties for sale in Leeds to find your ideal home.

Sellers: Make Your Property Stand Out

With more properties entering the market, sellers need to ensure their homes capture buyers’ attention. According to data from the Land Registry, homes priced up to £350,000 are selling the fastest as buyers prioritise affordability. So, sellers should think creatively about how to make their property appealing.

Tips for Sellers:

• Emphasise Energy Efficiency: With rising energy costs, energy-efficient features are a strong selling point. Simple upgrades, such as adding draft-proofing or energy-saving bulbs, can boost appeal.
• Focus on Online Presence: Make sure your estate agent is promoting your property online, including on social media. At Lota Properties Ltd, we are highly proactive on our socials, ensuring your home gets the best online coverage.
• Be Transparent About the Property’s History: Buyers appreciate upfront information, so sharing recent upgrades or repair work can help build confidence.

As it’s spooky season, why not add a touch of seasonal charm to your home for viewings. Think autumnal wreaths or a few pumpkins by the door. For guidance on selling your home in Leeds, contact us on 0113 2498010.

Landlords: “Spooky Season” Maintenance Check

Autumn is when landlords should be preparing their properties for winter. So, put a Halloween spin on things by doing a “spooky season” maintenance check! Now’s the time to fix any drafty windows, creaky doors, or leaky pipes that might cause trouble in the colder months. Consider sending a Halloween-themed email to tenants, letting them know you’ll be checking the property. This proactive approach shows you care about their comfort and keeps your property in good shape.

Tips for Landlords:

• Consider Allowing Pets: Demand for pet-friendly rentals is growing, so allowing pets can broaden your tenant pool.
• Update Your Agreements: Check your tenancy agreements to ensure they reflect the latest legislation, particularly around notice periods and tenant rights.
• Invest in Energy Efficiency: Simple updates, like installing energy-efficient lighting or insulation, can improve your property’s appeal while meeting future standards.

Landlords in Leeds can reach out to Lota Properties Ltd for help with property management. Call us on 0113 2498010 for more details.

Renters: High Demand Meets New Rights

For renters, there is higher demand for rental properties, with rents up around 5% over the past year, according to ONS figures. As the Renters’ Reform Bill moves forward, it’s a good time to understand your evolving rights as a tenant, especially with protections against eviction becoming stronger.

Tips for Renters:

• Be Ready to Move Quickly: The rental market is competitive, so have your references and proof of income ready to act fast when a property becomes available.
• Know Your Rights: Familiarise yourself with the latest tenant protections, particularly regarding eviction and rent increase regulations.
• Consider Flexibility: Widening your search area or being open to different move-in dates can open up more options in a competitive market.

As Halloween approaches, some neighbourhoods may feature festive décor that gives a sense of the local community spirit. Take a look at our rental properties in Leeds, or email enquiries@lotaproperties.co.uk for personalised recommendations.

Property Market Outlook

This month, the UK property market brings a mix of opportunity and challenge. Buyers can find deals, sellers need to go the extra mile to stand out, and landlords are encouraged to stay proactive with property maintenance. Renters should remain aware of their rights while acting quickly in a competitive rental landscape.

Whether you’re buying, selling, renting, or managing property, we’re here to help. Contact Lota Properties Ltd on 0113 2498010 or email enquiries@lotaproperties.co.uk for personalised advice and services in Leeds.

Enjoy the spooky season, and happy house-hunting!