Tax Allowances on Income from Property for Landlords
By Sarah Clements
If you are a new landlord you may not yet be fully aware of the tax deductions that may apply to you. By ensuring you are aware of the tax deductions and by keeping all your expenses related to your property portfolio carefully documented, you may be able to turn a little more profit on your rental properties.
Listed below are seven top tips for landlords of where tax deductions may be able to be made that may help reduce landlord costs dramatically.
- You can deduct the premiums you pay for almost any insurance - such as fire, theft, flood insurance - for your rental activity. Get a landlord insurance quote and arrange your property insurance if you haven’t done so already to ensure you are fully covered for any issues which might occur.
- The costs of repairs on your rental property portfolio are fully deductible in the year in which they are incurred.
- Make sure you keep a record of the number of miles you drive to and from your rental properties as landlords are entitled to a tax deduction whenever they drive anywhere for their rental activity.
- Interest is often a landlord’s single biggest deductible expense. Interest on credit cards and on loans for various purposes for their rental property should all be exempted from the taxes.
- If you travel overnight in connection with your rental activity, you should be able deduct your airfare, hotel bills, meals and other expenses. But all the documents should be kept very carefully.
- Landlords may be able to deduct their home office expenses from their taxable income. Additionally, if you hire anyone to perform services for your rental activity, their wages should also be deductible from the taxes as a rental business expense.
You may be able to obtain a tax deduction against casualty losses such as any type of damage or destruction.
- You can deduct fees that you pay to attorneys, accountants, property management companies, real estate investment advisors, and other similar professions, as operating expenses.
Tax deductions for landlords can make the difference between losing money and making a profit on their rental property portfolios. So make sure you take full advantage of the ways that you can cut costs including keep a close eye on the tax deductions you may be able to make. More information is available on the UK Government’s Direct website
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