Renting out property

  • Thread starter Terence Lynock (MSW)
  • Start date

T

Terence Lynock (MSW)

We have had our house on the market for about four months now and
decided to sell just as the bottom dropped out of the bucket and
everything went downhill, now we are just sitting and hoping we can find
a buyer but one idea was to rent out this stately pile and use the
proceeds to pay the morgage on another house in South Wales where we
want to move to.
Subject to us actually managing to find a lender how would this
arrangement affect my Pension Credit? we would have a monthly income
from this house of approx £500 but this would have to go straight out
again to pay the mortgage on the house we will live in, I have three
years before I actually retire and ealthough I dislike the idea of the
responsibility of two properties, morgages and so on it looks to be the
only way we can get out of this area to somewhere we want to be,

regards, Terry
 
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M

mart2306

We have had our house on the market for about four months now and
decided to sell just as the bottom dropped out of the bucket and
everything went downhill, now we are just sitting and hoping we can find
a buyer but one idea was to rent out this stately pile and use the
proceeds to pay the morgage on another house in South Wales where we
want to move to.
Subject to us actually managing to find a lender how would this
arrangement affect my Pension Credit? we would have a monthly income
from this house of approx £500 but this would have to go straight out
again to pay the mortgage on the house we will live in, I have three
years before I actually retire and ealthough I dislike the idea of the
responsibility of two properties, morgages and so on it looks to be the
only way we can get out of this area to somewhere we want to be,

                            regards,          Terry
No idea of pension credit side, but from the tax side you'd be liable
for tax on any profit from the rent itself.
Knock off the expenses payable for renting out the old house,
including any mortgage interest it has. But your new place won't
affect tax liability, if any, on the profit from the old place.
And profit is income.

Martin <><
 
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Q

quickcalc

For Pension Credit the value of a second home counts as capital.
Exception is if you are actively trying to sell it.
So you'd be unlikely to qualify for any Pension Credit with a house-
sized lump of capital.

However, this will not affect your state retirement pension or any
private pension.
 

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