I have a couple of properties on buy to let mortgages and was wondering if there is a way or reducing your tax you may have to pay when you sell it or not and do they automatically know when you sell the property and chase you for the money?
2007-04-23 04:24:26 · 6 answers · asked by garyweir11 1 in Business & Finance ➔ Renting & Real Estate
You have to be a bit careful here as if you are caught for tax evasion, you can be put in prison.
Basically, if you lived in the property for 6 moths, then you can get 3 years tax relief when you sell it. If you sell it after 4 years, you will pay tax on 25% of the increase in value from when you bought it to when you sold it.
If you haven't lived in it, you have to pay tax on any increase in property value except for the house you live in.
You also have to pay tax on any profit you make whilst renting, but you can offset that against many things including the interest payments on your martgage, cleaning, maintenance etc.
2007-04-23 04:30:36 · answer #1 · answered by Marky 6 · 0⤊ 0⤋
Lol, big brother is always watching.
IRS through the HUD-1 reporting system will always get a 1099 on all real estate transactions
What you want to remember is that your long term & short term capital gains is a smaller tax than regular income and to put off paying taxes on a gain you might want to consider doing a 1031.
If you do want to consider a 1031, make sure you get the guidance of a licensed agent that is familiar with such exchanges, since if not done right it can come back and bite you.
IRS: Selling your Home Publication: http://www.irs.gov/publications/p523/index.html and http://www.irs.gov/publications/p523/ar02.html
When all else fails, contact them, they are supposed to give you guidance on what is supposedly in your best interest when it comes to savings taxes. Remember the folks that work for them are just like you and me and they put their pants on one leg at time.
IRS: Contacting your local IRS office: http://www.irs.gov/localcontacts/index.html
I wish you well on your research
2007-04-23 04:35:18 · answer #2 · answered by newmexicorealestateforms 6 · 0⤊ 0⤋
Your question doe not say which country you are in. You have some UK answers and one USA answerer. The only similarity in tax laws: when you realize capital gains, you owe capital gains tax, regardless of the country. Talk to your own tax adviser. On this site someone can tell you the exact wrong thing, just for the fun of it.
2007-04-23 04:50:16 · answer #3 · answered by regerugged 7 · 0⤊ 0⤋
The only time you don't have to pay CGT is if the property is your main residence. You have up to 3 years grace from moving out, so if you've ever lived in your BTL and claimed it as your main residence then you won't have to pay CGT, as long as you sell within 3 years of moving out.
And yes the Inland Revenue will know that you have sold your house.
2007-04-23 04:29:52 · answer #4 · answered by RRM 4 · 0⤊ 0⤋
you could owe capital tax at 15% on the a hundred,000 benefit once you sell it regardless of while she passes away. a lots greater beneficial plan is for her to maintain the identify in her call and basically upload you because of the fact the beneficiary at her dying. it particularly is stated as flow On dying or TOD. That way you nonetheless get the stepped up fee foundation to her dying fee to compute your benefit which may well be 0 in case you offered it quickly after dying.
2016-10-13 06:49:39 · answer #5 · answered by lishego 4 · 0⤊ 0⤋
as far as i know you pay cap gain tax on more than 1 prop, and the land registry are duty bound to inform tax man,
can you put prop in family members name?
2007-04-23 04:32:57 · answer #6 · answered by Anonymous · 0⤊ 0⤋