4. Managing Your Buy to Let Investment
The final stage in our guide on how to get a buy to let property is to look at how you will manage your investment.
Owning a buy to let property comes with a lot of work, and you may want to consider whether you plan to manage your property yourself or hire a rental management company to do so for you.
Once you’ve purchased your buy to let property, there are also some legal considerations to know about and taxes that will need paying.
Find out more in the final section of our guide on how to invest in a buy to let property.
Taxes to Know About
The main taxes that you need to know about when it comes to buy to let investment are:
- Stamp duty tax – Payable when buying your property.
- Capital gains tax – Payable upon the sale of a property, provided your property has grown in value.
- Income tax – Payable on the money you make in rental income throughout each tenancy.
In recent years, taxes for buy to let have changed with new rules introduced in Summer 2020.
In order to make property purchases easier and strengthen the housing market during covid-19, a stamp duty holiday was introduced.
It meant those buying a buy to let property, a first home, or a second home, could save on stamp duty tax.
As of October 2021, however, the stamp duty holiday has officially ended, meaning stamp duty tax rates have reverted to pre-Covid levels.
If you’re wondering how to buy a buy to let property, stamp duty on buy to let property is something to factor into your overall costs.
The amount you pay in stamp duty tax varies depending on the type of buyer you are.
The majority of buy to let investors will pay a higher rate of tax than first-time buyers, for instance, as those who already own a home who are buying a second property to rent out pay a stamp duty surcharge.
Find out more about the latest buy to let tax rules and things you should know about for 2021 with our helpful blog post.