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How residential property is taxed

Robert Pullen of Blick Rothenberg explains the tax bills landlords can expect from HMRC
How residential property is taxed

The UK residential property sector has roughly the same value as all of the companies listed on the UK Stock Exchange combined. It is therefore one of the two major asset classes for investors. The market is diverse, with city apartments being the most favoured by passive investors due to the 'lock and leave' principle. In particular, 'buy-to-let' investments have become very popular, with most lenders now offering a buy-to-let mortgage package.

It's an investment that's suitable for investors who are prepared to tie money up in real UK property with no immediate access to it, other than rental income. The investment is illiquid and there are transactional costs on purchase and sale. Money can be raised by mortgage against the property, with the debt repaid out of rents. Individuals who relocate abroad benefit by being 'locked in' to the UK housing economy while living away, giving protection from UK house price inflation.

The majority of private investors hold either one or two properties in addition to their main home. A relatively new 'build-to-rent' principle is emerging where a wealthier landlord or syndicate, typically a company, will commission the construction of a block of apartments for the purpose of furnishing and immediate letting to the public.

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