Residential Property
Lettings Agents & Property Management

The Property Ombudsman Money Shield

The Tax Position

Will I have to pay Tax on my Rental Income?


  • Mortgage interest (usually allowable to the full value of the mortgage)
  • The cost of providing services included in the rent e.g. gas, electricity, water rates.
  • Legal and accounting fees
  • Insurance for buildings and contents
  • Ground rent
  • Repairs and redecoration
  • Wear and tear allowance for furniture, fixtures and fittings

The short answer is "yes", the long answer is "it all depends". You will be liable to pay income tax on your net income from the property, that is the gross income less allowable expenses which are incurred in letting the property. There are few problems for most Landlords in this connection, but in view of the importance of this issue and its potentially complex nature, separate fact-sheets on tax are available for Landlords on request. We also have arrangements with local accountants who, at no initial cost, will be pleased to give our Landlord clients an outline assessment of their likely position.

What happens if I am Overseas?

If you live abroad permanently or are working abroad for an extended period you will still normally be required to pay income tax on the net income from any property letting. There are some additional obligations on the part of the letting agent with respect to overseas landlords which you should be aware of. We are required to withhold a proportion of rental income (equivalent to the basic rate of tax) and pay this directly to the Inland Revenue unless we receive specific written exemption from the Inland Revenue not to do so. We are able to provide you with the appropriate documentation to apply to the Inland Revenue for this exemption, thus allowing us to pay you rent without deduction of tax. The granting of exemption to withholding tax is at the discretion of the Inland Revenue and is likely to be withdrawn if you subsequently make the appropriate tax returns.

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