We know you already know that if you own a property you let out that you need to complete a tax return every year. But do you still need to do a property tax return even if you’re not making any money from the house and you’re employed?
Yes – and this blog post will tell you exactly why it’s still important you complete it yearly.
How Property Tax Return Works
The first £1,000 of your income from property rental, as with other self employed income, is tax-free.
If your income from your property is between £1,000 and £2,500 a year you should complete a tax return, but once you earn over £2,500 per year you must report it on a Self Assessment tax return.
We spoke to accountant Caroline Hocking of Mona Accountancy Services and she said: “Even if you’re not making profit on your property, you should still fill out a tax return. You can offset your losses on the property against future profits so you pay less tax overall.”
If you own many properties and make a loss on one of them, you can offset the losses from that property against the others as well, which is a nice bonus.
Caroline also wanted to remind you that if the property is jointly owned you and your partner should both fill out a tax return for the property.
Also, note that if the property income takes you or your partner over £50,000 a year income, then the High Income Child Benefit Charge may come into effect – see our blog post for more information on this.
Please note, we try to ensure the information on this website is correct at time of writing but the information given does not constitute legal advice and are provided for general information.