Tax will be charged on income received from rental properties after allowable expenses are deducted.
However, you are eligible for tax relief on the following:
- The interest on the mortgage
- Rental insurance
- Any maintenance of the property
- Letting agency fees
- 10% of the rental income each year to cover depreciation in the value of furnishings, including sofas and carpets (this does not include fittings such as kitchen units and bathroom suites)
For more information on tax implications of renting property, you can contact your local tax office for a copy of the Inland Revenue Property Income Manual (PIM).