[Avatar]

First Letting Fee / Mortgage Product Fee

16/01/2019 14:25:27
I bought a BTL property last June 2017 and first let it in Sep 2017. On an AST for 12 months.

The letting agent that found / vetted the tenant charge a letting fee of £360.

From what I have read online I am unsure if I can claim this as a management cost with it being associated with the first letting of the property ? Please could you confirm?

Also the mortgage I used to buy the property had a product fee of £995 which I added into the mortgage balance - I have read conflicting things online as to whether I can use this as tax deductible?

Thanks in advance
[Avatar]

Re:First Letting Fee / Mortgage Product Fee

16/01/2019 14:40:47
Hi,

The original letting fee of £360 is not an allowable expense.

The fees incurred in obtaining the finance are included in the finance charge restriction.

They are allowable but restricted to 75% for 2017-18.
[Avatar]

First Letting Fee / Mortgage Product Fee

16/01/2019 14:45:32
Thanks so just to check I also paid for things like a valuation fee / telegraphic transfer fee for the mortgage - again can I include these in finance charges as long as I split 75% / and 25% in other property finance costs?

I dont think I can include the solicitors costs?
[Avatar]
  • HMRC Admin 50
  • Joined: 21/06/2017 15:34:03
  • Messages: 1615
  • Offline
  • View profile
  • Send message

Re:First Letting Fee / Mortgage Product Fee

16/01/2019 14:52:22
Thanks for your question.

The valuation fee would be included as an allowable cost when you sell the property for capital gains tax purposes. The fee for the transfer of the mortgage is allowable as finance charges and the 75%/25% rule applies.