What are my costs?
It is important to remember that there are costs associated with being a landlord, so it’s critical you have an understanding of what needs to be paid, although a letting agent can help with this.
It’s important that you take out a landlord insurance policy. As well as covering the building and its contents, we also offer specialist rent and legal protection insurance. Landlord insurance can include rental protection cover, and some policies can cover legal costs in the event of a dispute. While landlord insurance does come at a premium due to the increased risk, most standard homeowner insurance policies will be invalidated if you let out the property. So to protect the building, contents and rental income, it’s a good idea to look at your options. Your local branch can help provide more information on our 5* Defaqto rated landlord insurance policy, which is underwritten by AXA Insurance.
From initial property purchase through to ongoing landlord charges to final release of a property, every stage carries a tax obligation. For instance, it’s possible you could have to pay a higher rate of income tax from letting the property out. Equally, there are expenses that are eligible for tax relief.
How much is stamp duty on buy-to-let?
If you already own a property, the stamp duty you pay in your buy-to-let will fall within the parameters of owning a second home. This means that the stamp duty will include an additional 3%.
For example, if the buy-to-let property you’re buying costs £500,000, then the stamp duty you pay is £27,000:
On the first £250,000 you pay 3% (£7,500)
On the rest of the £250,000 you pay 8% (£20,000)
Total Stamp Duty Land Tax to pay is £27,500:
£7,500 + £20,000 = £27,500
To find out more about stamp duty land tax in England, read our guide here. For Scotland, click here, and for Wales, click here.