Property Tax

What and how

We like to own property, whether this is our own home, a rental property or for our business.

Property values tend to rise over time and so property ownership is a fundamental part of our wealth management. Unfortunately, UK property tax is complicated.

Our team of tax experts can help you navigate this landscape, allowing you to make informed decisions.

There is no single property tax in the UK, but a collection of taxes that apply in different situations.

  • UK property tax applicable to a landlord
  • UK property tax applicable to a property owner

UK property tax applicable to a landlord
As a landlord you may be liable for the following taxes:

  • Rental income tax
  • National insurance contributions
  • Stamp duty land tax
  • Capital gains tax

When you buy an investment property you must pay stamp duty, when you sell it, you are liable for Capital Gains Tax.

Income tax and national insurance contributions are paid yearly and reported through your self-assessment tax return.

Non-resident landlords are still liable to pay rental income tax in the UK.  This is paid either through:

  • Non-resident landlord scheme (NRLS)
    Here the tenant or letting agent will deduct tax from the rent before paying to the landlord. The tax is then paid to HMRC.
  • Self-assessment
    The non-resident landlord will need to register for UK income tax and propose a self-assessment tax return.

If the above sounds simple, we have bad news for you… it is not.

But our team deal with these matters all the time – so just call us and we will do the rest.

If your properties are held through a limited company and have a value in excess of £500,000, there is a further tax to consider: Annual Tax on Enveloped Dwellings or (ATED).

UK property taxes applicable to a property owner
There are many taxes to be aware of:

  • Council tax
    This is a tax charges by local authorities and paid annually by all homeowners.
  • Stamp duty tax
  • Capital Gains Tax
  • Ground rent
    This charge arises if the land on which your house sits belongs to someone else. It is paid annually.
  • Inheritance tax
  • Land and buildings transaction tax
    This is a one-off tax paid when you buy a Scottish property.
  • Business rates
    Payable on all non-domestic property (shops, offices, factories). It is paid yearly.

Stamp duty land tax
This is the tax paid on the purchase of a property or land in England of Northern Ireland.

It is calculated as a percentage of the purchase price, but the nature of the property determines the rate payable.

Trickier than it might sound….

There are many exemptions and relief that can be applied. These constantly change, but you don’t need to worry about knowing the details. That’s what our team is here to do.

What if my property is not in the UK?
Again, don’t worry. We understand UK property tax. We know people who understand property tax in other places. That is why we work with our colleagues at HLB International.

Did we say property tax was complicated? It is, but our team of experts are all over the details, so you are in good hands.