After marginal decreases in property values in the latter part of 2023, and with mortgage interest rates still at their highest in more than a decade, some are using the chance to jump out of the property market, downsize or sell second properties and invest the cash.
If you’re thinking of selling property or downsizing and investing the proceeds, there are a few things you need to consider.
With house prices at all time highs, mortgage rates on the increase and disposable incomes under pressure, the property rental market has been booming as individuals, couples and families choose to rent rather than buy. If you’re thinking of buying a property to rent or you’re switching your current property to a rental as part of a relocation, you’re going to need to know about the tax implications of doing so.
Some positive news has emerged regarding the economy as early Spring marked an upturn in the number of mortgage applications being approved. The figures are encouraging as they come off the back of an extended period of below average lending for house purchases, viewed by the government as one of the mainstays of the British economy.
Following the completion of the latest round of Self-Assessment, HMRC is reported to be looking into undeclared income from short term lettings that it believes should have been included on tax returns in January. Those believed not to have declared income will be sent ‘nudge’ letters.
There’s little doubt that business rates need reforming from top to bottom as was highlighted in the Government review completed in 2021. But as well as introducing reform to the calculus, the Government has committed to digitise the system from 2026/27. However, there is now a suggestion that it could tie up with the Government’s Making Tax Digital (MTD) strategy to form part of that broader, holistic view of tax liabilities and payments.
In a slightly bizarre twist, as the Bank of England was announcing its recent interest rate increase of half-of-one-percent, it was also scrapping a key affordability test that lenders had to conduct to ensure borrowers could afford… an interest rate increase!