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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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If I buy a house with a mortgage and let them live rent free

Resolved Question:

If I buy a house with a mortgage and let them live rent free but they pay all bills apart from capital gains tax when I sell is there any other tax to consider .thanks
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi. Is this a house you have lived in yourself or just let? Are you related to the tenants?
Customer: replied 2 years ago.
I am buying the house specifically for my elderly parents to live closer to me . So it has never been rented before but
I want them to live rent free , but pay the utilities , council tax , insurance etc . Thanks
Expert:  TonyTax replied 2 years ago.
Hi.

There is no problem with letting your parents live rent free apart from the running costs you mention. Strictly, you should disclose the letting in a tax return and offset the expenses you incur (mortgage interest) up to the level of the rent you receive but no more. Take a look here for information on the tax situation for properties not let on a commercial basis. Any losses cannot be offset against other rental income.

Apart from CGT when you sell the property, there isn't anything else you need to consider. You may have to pay stamp duty at the time of purchase of course.

I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 2 years ago.
I will be back in about 30 minutes.
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