Despite a challenging few years for the buy-to-let market, characterised by tax and regulatory changes, investment in the sector has continued to outperform most major asset classes, as Britain’s rented sector continues to expand, with a sixth of the population now living in accommodation rented from private landlords.
Total property income declared by unincorporated landlords in 2021-22 was £48.8bn, up from £46.3bn the previous year, new figures show.
According to HMRC, 2.79m landlords filed self assessment tax returns, with the overwhelming majority operating as individual buy-to-let landlords. There were also 300,000 partnerships with rental properties, earning £6.17bn.
The total income from UK property increased by 10% in the five years from 2017 to 2022, driven by an increase in average income to £16,700 and the number of landlords was up by 100,000.
The largest category of expense was finance costs, with £6.85bn being claimed in 2021-22. This accounted for 29% of all expenses claimed against UK property income by unincorporated landlords
The most common expenses claimed were rent, rates and insurance, and repairs and maintenance, with 67% of unincorporated landlords declaring expenses of these types with total claims up 6%.
While the majority of landlords buy property directly, a growing number of investors are using limited company structure to reduce their tax bills.
And the net figure was what?
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So that £48.8bn was taxed by the government regardless of actual profit.
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I thought this might include a rough estimate of how much actual profit had been made. If an investor in shares values their portfolio they don’t just look at the dividend income, they include the current value of the shares held.
BTL landlords do the same. One of our best rental’s has paid £25k in rents in three years, but has increased in value by £80k in the four years we’ve owned it.
The renovation costs were of course not tax deductable until we sell. £10k
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