Home owners

The sections below contain tax saving advice for home owners.

Rental income

If you rent out a property owned by you, you must include on your tax return details of all income expected to be received during the tax year, even if it hasn't been received until after 5th April.

A property will qualify as furnished holiday lettings if it is in the UK and is available for holiday letting to the public for 140 days or more during the year. It must actually be let for 70 days or more during the year and must not be occupied continuously for more than 31 days by the same person, for at least 7 months of the year.

Rental losses

If you make a loss from your rental income in the year, you can carry this forward and set it against the rental income of the following tax years until it is used up.

Mortgage lenders

If you let out rooms in your home, or a separate property, and you have a mortgage on that property, you should inform your mortgage lender of the situation to ensure you are not breaching the contractual agreement between you. If your letting income falls within the rent-a-room scheme, most lenders will not have a problem.

Similarly you should also inform your insurer.

Rent a room relief

If you rent part of your home out you may be able to claim the rent-a-room relief (£4,250) to set against your letting income. You do not need to claim this if the expenses related to the letting are greater than the rent-a-room relief (eg advertising for tenant, wear and tear on furnishings supplied etc).

Stamp duty

Stamp duty is payable on property transactions where consideration is over £120,000. The bands are £120,000 - £249,999: 1%; £250,000 - £499,999: 3%; £500,000 or over: 4%. Thousands of pounds can be saved by legally avoiding the higher rates of stamp duty.

A common tactic is to sell homes for just below the thresholds (e.g. £249,999 or £499,999). Fixtures and fittings are then sold separately. Any object that can be removed from the home can be sold separately. These typically include curtains and carpets, although it has been known for standalone kitchens and baths to be sold separately.