If you live in a property and then sell it, generally you will pay no tax on any profit you make. And normally, when you buy a property and let it out, you will pay tax on all the profit you make on the sale. (Note: there are some exceptions in both case) However, if you let out a property you have lived in, there are tax reliefs that could save you a great deal of tax on your profits when you come to sell it. When you sell a property you have lived in, even if you are not living in it currently, you can claim tax relief for the time you did live in it and for the last 18 months before you sell it. Additionally you can claim “Letting Relief” of up to £40,000 for the period of time it was let. So if you are planning to invest in additional properties, it is worth knowing how these tax advantages could make Let-to-Buy an attractive option.
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