Tax & Insurance
Helping with Navigating Being a Landlord
We make it simple to learn about property taxes and find the right insurance. With our guidance, you'll have everything covered, keeping your rental safe and following the rules.
Becoming a Landlord
Embarking on the journey of being a landlord can be challenging, but at Sharples Lettings, we’re dedicated to providing guidance every step of the way. Explore this page for essential information on your tax obligations and insurance, ensuring a smooth and informed experience in property management.
Tax Implications
When you rent out a property in the UK, you need to know about the taxes you have to pay as a landlord.
As soon as you start making money from rent, tell HMRC. You can do this online or over the phone. You might also want to get help from an accountant.
Here are the main taxes you might have to deal with:
Tax Deductible Expenses
Letting Fees
Fees associated with letting the property, such as those paid to a letting agent, are generally deductible.
Mortgage Interest
Landlords can deduct the interest on their mortgage payments, but this does not include the repayment of the principal amount.
Repairs & Maintenance
Costs incurred for repairs and ongoing maintenance of the property are eligible for tax deduction.
Insurance
Premiums for landlord insurance, covering buildings and contents, are considered allowable expenses.
EPC's & Utility Checks
Expenses related to obtaining Energy Performance Certificates (EPCs) and utility safety checks are typically deductible.
Accountancy Costs
Fees paid to accountants for managing tax affairs and financial records are considered legitimate deductible expenses.
Insurance Requirements
If you’re considering becoming a landlord you are legally required to have certain types of insurance coverage. The primary one is Buildings Insurance, which covers the structure of the property against events such as fire, flood, and other specified perils. This insurance is often a requirement for mortgage lenders.
As a landlord, it is essential to have either buildings insurance or a comprehensive buildings and contents insurance policy. While tenants are typically responsible for their own contents, it’s crucial to note that in the event of a major peril, such as a fire or flood, their responsibility may be limited. Landlords’ insurance policies often include a public liability component, which is a vital aspect of coverage that should not be overlooked.
Additionally, if the property is part of a block of flats, the freeholder or management company may have buildings insurance for the entire block, but landlords should confirm this.
Call Lake District Mortgages and they will help you with buildings insurance.
Choosing the Right Insurance for your Property
Building Insurance
Building insurance is a fundamental coverage that protects the physical structure of a property against various risks and perils. This includes damage caused by events such as fire, flood, storm, subsidence, vandalism, and theft of fixtures.
The policy typically covers the structural elements of the building, such as walls, floors, roof, windows, and permanent fixtures like kitchens and bathrooms. In the event of a covered incident, building insurance helps cover the cost of repairs or rebuilding the structure.
It is a crucial requirement for property owners and landlords, especially those with a mortgage, as lenders often mandate this coverage to safeguard their investment.
Building & Contents Insurance
Building and contents insurance is a more comprehensive policy that includes not only coverage for the building structure but also protection for the landlord’s belongings within the property.
While the building coverage remains the same, the contents portion of the policy extends to items like furnishings, appliances, carpets, and other personal property owned by the landlord.
This type of insurance provides an extra layer of protection for the landlord’s investment, ensuring that both the structure and its contents are financially safeguarded against unforeseen events.