In this two-minute read,
we look at the implications of selling a buy-to-let property.

If you’re a landlord looking
to downsize your property portfolio, you may be thinking about selling one or
more of your buy-to-let properties. This process isn’t always as
straightforward as a regular property sale, so we’ve pulled together some FAQs
to think about.

Who should I sell my
property to?

To sell to another landlord, keep
it simple. Make sure the property is clean, clutter-free, and liveable – just
as you would before renting it out yourself. This helps the buyer see its
rental value and that it can be occupied quickly.

Increase your market by
selling to potential residents. Again, make sure the property is clean and
clutter-free, but make it feel more homely rather than just an investment
opportunity.

In both cases, take care of
any repairs prior to selling and get it deep cleaned before viewings begin.

What if my buy-to-let is
tenanted?

In most cases, it’s easier to
sell a vacant buy-to-let. However, if you do plan to sell while your tenants
are in contract, you’re limiting your market to other landlords.

Be warned, selling while
tenanted will mean more admin. You’ll need to provide the tenancy agreement,
gas safety certificates, and other associated rental documents. You’ll also need
to arrange for the tenancy deposit to be transferred to the new landlord.

Avoid the hassle of extra
paperwork and plan your buy-to-let sale towards the end of a tenant’s contract.
Provide a Section 21 notice to your tenants. This gives them two months to find
a new home and makes your sale easier.

What are the tax
implications of selling a buy-to-let?

Buy-to-let properties are
subject to capital gains tax (every landlord’s least favourite few words!).
Your tax bill is calculated by looking at how much the value of the property
has increased since you’ve owned it. So, if you bought a rental for £100,000 and
it’s now worth £150,000, you’ll be liable for CGT on the £50,000 (less
allowable expenses).

Make sure you speak to an
accountant to understand what expenses can be offset and your personal tax
rate.

What about my mortgage?

If you took out a long-term
fixed rate buy-to-let mortgage, you may need to prepare for a hefty early
repayment charge once the property sells.

Speak to us at CWB
Property if you’re thinking about selling a buy-to-let.