© G Chilvers 2016
John owns 6 houses. He rents them at £160 per week, Total rent £50K per year.
The properties are worth £1M. John has £500K of his own money invested in the portfolio.
John has a £500K mortgage at 4% costing £20K a year in interest payments.
John has running costs and vacancies amount to £12.5K per year.
John’s Gross income is £17.5K per year.
John pays income tax of £1.35K
John’s net income is £16.1K per year.
After the full introduction of the Landlord Tax
John has no extra Landlord tax to pay.
If interest rates rise by 2%
John has to pay £0 in Tax and his net income will be £7.5K.
Small Landlord Example