CGT on property

[BMWChris]

We're probably going to let our house out and buy another one. Not becuase we want to be property barrons but because we want to be able to move quickly when we find the right house and, with interest rates low and rents high, we can. We'd actually make a couple of hundred per month. The plan would be to sell in a few years, once the market is moving faster. My understanding is that we would have to pay CGT on the rise in value. who calculates the rise from when we start letting, rather than when I bought the house 8 years ago. We did sell the house this time last year (though it fell through with days to go) would this be a reasonable price. Or should we get it valued so we can calculate the rise?

Cheers

[LC23]

http://www.hmrc.gov.uk/cgt/property/sell-own-home....

This will help you. Please note that the gain isn't based on the rise in price from the point you move out. The full gain is calculated based on acquistion price and capital improvements versus actual sales price. You then look to see how much of the total period of ownership qualifies for relief.

[anonymous-user]

sell within 3 years and there is no CGT liability

[Eric Mc]

And any gain will be apportioned between the period you lived in the house (plus the three free yaers) and the period you didn'tr live in the house.

[NDA]

There is also the benefit of being able to claim up to £40,000 'letting relief'. This is available to anyone with a share in the property – giving a couple up to £80,000 between them.

[NDA]

Chris, a couple of tips if you're renting....

1. Negotiate the renewal fee with the agent at the outset. You should be able to hammer them down to half at this initial stage.

2. Be aware that when you eventually sell, you need your tenants out before you can exchange. This is a bit of a nightmare - I've just managed to lose both tenants and buyer all in one go. An expensive moment.

[BMWChris]

Thanks guys. Of course the biggest problem - given that we could afford to pay for two houses at once would be that we buy the new house and then the old houses (and new house) loose a lot of value and we have a shortfall.

Still, I can't see them dropping much more...