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Save More Money: Tax Planning for Landlords

Many people enter the rental property business because they believe it offers a quick path to financial success. Well, if you’re a landlord willing to invest time and energy, you can become very wealthy through your rental business.

Rental property investment is a good low-risk way to build wealth. However, managing a rental property is also costly and time-consuming. 


Consider the large initial investment required to purchase a property and your availability to devote extra time to maintenance, repairs, and advertising to ensure a steady income stream. 

More than these, the tax burden is a significant factor to think about.

If you collect rent as a landlord, the money is considered income and is subject to income tax. Many landlords still don’t realise that smart tax preparation can help them save money from this tax deduction. 

Subsequently, you can shield rental income from expensive taxes with the help of tax professionals like us at Pearl Lemon Accountants.

Call us to learn more about what we have in store for you.

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Investing In Rental Property 101

Rental property investment might be a wise strategy to boost your monthly income. This is not all, though. Here are some more considerations to remember if you’re contemplating whether or not to invest in rental properties today.

Passive Income

One of the greatest advantages of property investment is the potential for passive income

This means that it is a reliable source of money that requires little work. It’s something to consider if you want to supplement your income or save for retirement, as both are good reasons to pursue it. 

However, keep in mind that rental profits may be subject to a different tax rate than workers’ compensation.

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High ROI

If you borrow money to invest, you can put in less of your cash while still getting the same or even greater return on your invested money. Rent from tenants can be applied toward the principal and interest on a mortgage loan, in addition to covering the property’s other operating costs.

Property Value Appreciation

If you rent out your home now, you may wait until the market is favourable before selling, giving you a better chance of profiting from future price increases. 

Appreciation rates will differ from market to market. Find out what kind of returns you can expect by looking into price appreciation in various cities and areas.

Diversifies Your Assets

Diversification is a central task in the world of investing. Diversifying your investments across multiple markets with the potential for long-term growth can help you reap the rewards of your financial efforts while limiting your risk exposure. 

Building a real estate portfolio can help you achieve your long-term financial goals by providing a steady income stream.

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Tax Breaks for Homeowners

Now that you know a thing or two about the investment field you’ve entered, we’re here to inform you of how tax can favour your side.

When you’re a landlord, you can take advantage of many tax breaks such as:

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Paying interest on a loan used to purchase or improve the rental property is a tax-deductible expense for the landlord. Credit card interest charged for home improvement purchases is also deductible.


If a piece of real estate is generating a profit for you, you may be eligible for tax breaks in the form of depreciation. This allows property owners a tax write-off over several years.


The cost of repairs is tax deductible in the year they are completed. When filing your taxes, you can write off the cost of home improvements, including repainting, fixing the floors, and replacing broken appliances.

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Home Office

Working from home as a landlord is widespread, and if you do so, you may be eligible to deduct some or all of your home office costs from your taxable income (provided you meet specific requirements).


If you have a rental property, you can deduct the cost of any insurance policies you have on it. This may cover the cost of an employee’s insurance plan and liability insurance for landlords.

Sweet, right? Well, it’s just a few of what we know about tax planning for landlords. If you want to know more about where we can get tax breaks for you, give us a call.

What You Need to Know About Filing Your Tax Return & How We Can Help You

If you have earned income from renting a property, you must report it to HMRC

If you have another source of income and your rental income is small enough, we can handle it by adjusting your PAYE code.

If HMRC asks you to, you must file a Self Assessment Tax Return detailing your earnings. We will accomplish this for you if your salary falls within the range of above $2,500 after allowable expenses.

The following factors will also determine if you need to file a tax return: the total of your rent, your profits, and any other income, such as from work or pensions.

Even if you don’t owe any taxes, you must provide information about your rental revenue and expenses for the year if we request a tax return from you.

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Some Tax Saving Strategies for Landlords From Our Experts

Tax efficiency is an aspect that landlords often disregard. 

Although tax-saving strategies for landlords aren’t as exciting as property hunting, they can make a big difference in your gains.

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Make the most of your property

This may seem obvious, but you’d be surprised how much money landlords leave on the table by not reassessing their rental properties. A professional revaluation of your rental property can significantly impact your company’s financial status and reputation in the marketplace.

To convince your lender to reconsider your loan-to-value ratio, you need a more precise estimate of the property’s value as a rental. Let’s say the value of your rental property rises. In that case, your loan-to-value ratio will fall, giving you more negotiating power and possibly a lower interest rate for your buy-to-let investment.

Consider short-term lets

You can take steps to minimise your tax liability as a landlord when you are between tenants. Utility bills and property tax payments are two examples of allowable costs during this time.

Moreover, the HMRC provides favourable tax treatment for short-term rental properties.  So, many prosperous property investors now include “short-term rental” properties in their portfolios.

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Extend to reduce

You can avoid paying a big stamp duty fee on your portfolio if you invest in your current properties, and doing so should also increase the value of your assets. 

Because of recent changes in development rights, you can now expand your current property portfolio, which should increase your monthly income.

Real gains can be earned by extending or expanding your property, provided you consider the ceiling price of the area wherein your property is located. However, you should be aware that future changes to the HMO rules may affect you if you make major renovations that could lead to increased occupancy.

Utilise all tax bands

If you’re a landlord, transferring assets to your spouse could be another strategy to reduce your tax liability. By transferring assets between spouses, you can avoid paying Capital Gains Tax and take advantage of your partner’s lower tax rate.

If your spouse’s tax bracket is lower than yours, you could also be able to reduce the amount of money you have to pay in taxes. Stamp duty land tax is not required if no mortgage on the property is transferred and no profit is made from the transfer.

Talk to a tax professional in your area to learn more about making the most of your tax bands. 

Get in touch with a tax accountant to discuss the potential advantages of using these strategies to manage your rental properties.

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Pearl Lemon Accountants Services

If you need help with your accounts or your taxes, we are always eager to help. Expert tax advisors are always available at Pearl Lemon Accountants.

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Corporate Tax Services

If you need help figuring out how to minimise your tax liability while still accomplishing your professional and personal financial objectives, don’t hesitate to consult with a tax accountant. 

Our clients can count on our expert recommendations, guidance, assistance, and individualised service.

Personal Tax Services

The growing complexity of the tax system isn’t something we see as a problem but rather as an opportunity for our clients to maximise their earnings.

We provide a strategic personal tax planning for landlords service designed specifically for your financial status and needs to assist you in minimising your tax liabilities and expenditures while remaining in full compliance with all tax regulations.

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VAT Accounting Services

Hiring a qualified VAT accountant in the UK can alleviate a lot of pressure from complying with the country’s complex tax system. Our accountants will handle all aspects of Value-Added-Tax (VAT) administration, including selecting a VAT scheme, calculating VAT, and settling VAT accounts.

The VAT experts at Pearl Lemon Accountants are available all year long to answer your concerns and help you get the most out of your tax return by navigating the complex VAT processes and minimising the time and stress you spend on them.

You may turn to Pearl Lemon for services like tax advisory and guidance for assistance with your financial tax matters. We can also help you get tax relief. 

Contact us now.

Why Pay More When You Can Pay Less?

A property business can vary in size and shape depending on the type of project. Whether it’s a residential property, a commercial property, or a private property, you may be bound to additional expenses like mortgage interest and the UK tax.

No matter your venture, tax planning for landlords issues and opportunities will need to be considered from the start and a range of taxation factors.

We know that UK landlords’ bills have increased significantly due to the Government limiting tax reliefs available to them. Every business owner wants to succeed, but tax rates are naturally tied to a business’s profitability.

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And if you’re not keen on the knowledge needed to maximise what you have- you’ll pay more than you’re due or even be subject to tax implications and tax investigation.

Pearl Lemon Accountants have the knowledge you need for that. We are chartered accountants that have studied years of business and accountancy to provide our landlord clients with the best tax planning strategy possible.

And we will continue this journey until every landlord realises they can definitely pay less and earn more from their investment.

If you want to be one of our valued clients, then book a call today to get started.


Your overall taxable income will determine the amount you owe. For example, if you are a basic rate taxpayer, your tax payment will be 20%, but if you are a higher rate taxpayer, it will be 40%.

Your National Insurance number is used to verify your identity and add you to the electoral register. Therefore, the electoral register is a simple and effective way for HMRC to learn about your property holdings. Several landlords hire estate agents to oversee their properties.

HMRC has the authority to investigate a landlord’s tax records going back as far as 20 years and even initiate criminal proceedings in the case of the most severe tax evasion.

When you allow us to keep track of your finances, you give yourself more time to do your work and please more clients.It's a win-win situation for everyone.Aside from that, you'll also gain financial stability because your assets and liabilities are managed well enough not to cause any trouble for you in the future.

So let our experts work for you, and you won't regret it even a bit.

Book a call today to get started.

Let’s Talk Accountancy.

Get in touch today, so we can discuss your accountancy needs, your business, your hopes for the future and just how Pearl Lemon Accountants can help you.