Net rent after management fees?
11:17 AM, 3rd November 2016, 9 years ago
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To arrive at Net Rent do you only deduct Council Tax, if you as the Landlord paying it, as per the advice on the HMRC website, but not Management Agent Fees, or is Net Rent after Management Fees.
Obviously, I’d like the answer to be Net Rent is only, as the tenant would never normally be responsible for Management Fees?
Many thanks
Terry
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11:20 AM, 3rd November 2016, About 9 years ago
Hi Terry,
Please see below tax deductible cost for letting residential property from .Gov >> https://www.gov.uk/renting-out-a-property/paying-tax
And yes agents fees are included:
Residential properties
You or your company must pay tax on the profit you make from renting out the property, after deductions for ‘allowable expenses’.
Allowable expenses are things you need to spend money on in the day-to-day running of the property, like:
letting agents’ fees
legal fees for lets of a year or less, or for renewing a lease for less than 50 years
accountants’ fees
buildings and contents insurance
interest on property loans
maintenance and repairs to the property (but not improvements)
utility bills, like gas, water and electricity
rent, ground rent, service charges
Council Tax
services you pay for, like cleaning or gardening
other direct costs of letting the property, like phone calls, stationery and advertising
Allowable expenses don’t include ‘capital expenditure’ – like buying a property or renovating it beyond repairs for wear and tear.