Now, tax and health and safety! Your two favourite subjects. No? Come on, it’s not that bad especially when tax exemptions are involved.
Tax
With income tax there are two allowances you can claim for furnished property lettings. You can’t claim both so must choose one and stick with it. The allowances don’t cover unfurnished residential lettings.
- The ‘wear and tear’ allowance allows you to claim on the tax you pay on income from rent. This is 10% of the house rent minus services and charges ie. the net.
- The ‘renewals allowance’ means you can claim the net cost of replacing a damaged item of furniture. However you can’t claim its total cost.
The HM Revenue & Customs website details how to claim the allowances and gives guidelines on wear and tear for private landlords.
Council Tax Exemptions
With vacant property rentals, there are two kinds of council tax exemptions you can apply for.
- If you rent property with furnishings but your property is empty, an ‘unoccupied discount’ can be applied for. Some councils offer a range of discount from 10 to 50%. The discount carries on until the tax year ends on 31 March and you will need to apply again for the following year.
- If you’re renting property without furnishings and your property is empty, you can apply for Class C exemption. Again different councils discount by different amounts but usually 100% discount is given. Each application lasts for six months when you’ll need to reapply.
Contact your local council for more details of discounts applying to your property rentals.
Read Part Seven for Safety Standards.