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strick206	posted on 27th Feb 12 at 07:08
	quote: Originally posted by James You can only offset the mortgage interest, not the actual repayments. Yeah you pay tax on the money that comes in which you use to pay off capital on the mortgage, the interest doesnt matter. I will be looking into doing this soon enough, but i need to do more reading on it. Also, an interest only mortgage? Surely it's better to get a repayment mortgage and just pay the tax on the capital that is paid off for you. Come the end of the mortgage you'll have the house as well then. Portfolio's everywhere
James	posted on 26th Feb 12 at 21:52
	You can only offset the mortgage interest, not the actual repayments.
Paul_J	posted on 26th Feb 12 at 21:45
	quote: Originally posted by James When I looked into something similar, after tax the rental income didn't cover the mortgage. Did you take into account the fact the mortgage repayments are a cost though and if you ran it like a business it could be offset against the money you make from rental income to avoid some tax? The other thing to factor is that, even if on the short term you're making a loss / breaking even - if you're repaying equity back into the property through the rental income, then it may not be as bad as it could seem. [Edited on 26-02-2012 by Paul_J]
James	posted on 26th Feb 12 at 20:47
	I didn't think it mattered whether or not you made a profit. I just thought you pay income tax on all of the rental income. So say you are current paying 40% tax on your earnings, you would also have to pay 40% tax on the new rental income.
NovaGTE2	posted on 26th Feb 12 at 20:36
	The current one is on buy to let. The tax isn't an issue as far as I am aware as there is no profit being made because in actually making a loss at the moment paying the short fall. However I will get capital gains tax if I sell it at a profit when I do sell it as I haven't lived in it for 6 months prior to selling it
James	posted on 24th Feb 12 at 15:52
	Have you considered the income tax on the rent. When I looked into something similar, after tax the rental income didn't cover the mortgage.
spencer88	posted on 24th Feb 12 at 15:51
	Is your current rented out property on a buy-to-let mortgage?
Twiggy	posted on 24th Feb 12 at 11:27
	Never do business with friends or family. Imagine if she cant pay the rent 1 month...
NovaGTE2	posted on 24th Feb 12 at 09:25
	I am thinking of buying a house for my sister to rent off me; im not to sure what would be the best way about it. Currentley have a house which me and my family live in and a flat which is rented out; both are on full repayment mortgages with the flat having 19 years left and have 26 years remaining. Have equity in both. Looking at buying a 3 bed semi detached house for circa £150K but not sure what would be best. I can either sell the flat and buy the house and keep on full repayment; or pull some equity out of that and my house and keep all three with the two rentals on Interest only with the posibility of putting one or both back to repayments in 5-10 years. I know either way is a gamble but which do people thing would be best?