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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 15940
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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how much tax will i pay if i rent my house out for 450 pounds

Customer Question

how much tax will i pay if i rent my house out for £450 pounds a month and how do i go about legally doing this.
Submitted: 8 years ago.
Category: UK Tax
Expert:  Tony Tax replied 8 years ago.
I'm not a lawyer so I cannot help you with the legalities. A letting agent normally organises the legal work required. If the property is mortgaged you may need the lender's permission to let the property.

The amount of tax you pay will depend on what expenses you incur that can be deducted from the rent before tax is worked out. These can include mortgage interest, letting agent fees, repairs, service charges (normally only applicable to flats), council tax where you pay it, etc. Take a look here for more information on the tax implications of letting property.

If you had no expenses to deduct from the rent, then you would pay tax of £1,080 if the property was let for a full tax year and you are a 20% taxpayer. If you are a 40% taxpayer you would pay £2,160 on a full year's rental income. This is assuming you have other income against which you offset your personal allowance.