Which taxes are associated with investing in a buy-to-let property?

Buy-to-let property investment involves paying a range of taxes.

Income from your property is taxed in the same way as money you earn at work and has the potential to push you into a higher tax bracket. The latest information on allowances and thresholds in relation to income tax is available here.

Capital gains tax can apply to any property you own that is not your home. It is calculated based on how much your capital has grown when you sell the property. There is an individual tax-free allowance (£11,100 for 2016/17) but gains above that amount will be subject to capital gains tax. Major improvements and some other factors are tax-deductible. The latest information on rates and allowances in relation to capital gains tax is available here.

Taxes and allowances change regularly, so be sure to avail yourself of the latest information at the time you plan to invest.

The above should not be construed as tax advice and everyone’s circumstances are different. You should verify any tax information from HMRC or a qualified tax adviser.

*The information provided should not be taken as financial advice in relation to the UK property market or property investment advice.

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