Landlord Tax Advice

Landlord Tax Advice
Landlords can calculate how much tax they have to pay by adding the rent money they receive to any other taxable income they earn.  The rate of tax they have to pay depends on what their overall income (salary plus rent) is for the tax year, minus any deductible expenses.  The expenses landlords can offset against their tax liability for rental income include:

• Interest payments on a mortgage.
• Repair and maintenance – e.g. plumbing and gardening
• Wear and tear – if a property is furnished, cost of appliances and fixtures
• Depreciation - straight line: residential building 27.5 years; commercial building 39 years 
• Energy efficiency investments - tax credits
• Property taxes
• Fees and bills – e.g. utility bills, landlord insurance, and rental agency fees
• Other related costs – e.g. advertising the property

If you really want to make life easier, ensuring good record keeping is key. Keep all receipts, no matter how small, they all add up.  Most importantly, set up a separate bank account so you can track what is going in and what is going out via your bank statements.  

We advise landlords to create a spreadsheet to record all of their incomings and outgoings.  When the time comes to filling out a tax return, this spreadsheet will make the process a lot easier, further down the line.