The largest motive for property investment is financial gain. Property is an inflation beating asset which is often used to add growth and income to your overall net worth. When investing, there are many facts and figures which should be known in regards to your income from your property investment.
Below we have listed some of these and broken them down to give you an oversight to the financial forefronts involved in property investment.
Depending on your personal income tax band, you may need to pay income tax on your buy-to-let rental income. Here we have listed the different tax bands, how much of the income is taxable and at what percentage rate.
| Band | Taxable Income | Tax Rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £150,000 | 40% |
| Additional rate | Over £150,000 | 45% |
In the UK, capital gains tax (CGT) is payable on any profits that you make from the sale of your buy-to-let property. Depending on your circumstances, the tax-free capital gains allowance can differ. You do not normally have a CGT bill if it involves:
| Type | 2022 - 2023 |
|---|---|
| CGT allowance for an individual | £12,300 |
| Couple’s allowance (married or in a civil partnership only) | £1,000 |
One of the most common questions property investors ask is: ‘How much stamp duty do I need to pay?’
You can use our calculator, which will help you determine the total amount owed.
Total stamp duty
£7,500.00
You must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England and Northern Ireland.
You pay the tax when you:
Send an SDLT return to HMRC and pay the tax within 14 days of completion. If you have a solicitor, agent or conveyancer, they’ll usually file your return and pay the tax on your behalf on the day of completion. They’ll then add the tax to their fees.
| Range | Rate | Amount |
|---|---|---|
| £0 - £250,000 | 3% | £7,500.00 |
| £250,000 - £925,000 | 8% | £0.00 |
| £925,000 - £1,500,000 | 13% | £0.00 |
| £1,500,000+ | 15% | £0.00 |
