As property values continue to shift across Kent—from the bustling towns of Maidstone and Ashford to the coastal hotspots like Whitstable and Margate—landlords and property investors are navigating an increasingly complex tax environment.
Whether you own a single buy-to-let in Canterbury or manage a portfolio across Medway, staying on top of your tax obligations and opportunities can mean the difference between a profitable investment and an expensive oversight.
As a Kent-based accountancy firm, we’ve worked with property owners across the region and understand the unique tax considerations that come with letting property in the South East. Here’s what you need to know.
1. Understand Your Rental Income Tax Obligations
All rental income is taxable and must be declared through a Self Assessment tax return. This includes:
Rent received from tenants
Income from holiday lets
Charges for additional services (e.g., cleaning, utilities, parking)
If you’re letting property for the first time or your rental income has increased, it’s critical to check if you need to register for Self Assessment with HMRC.
2. Know What Expenses You Can Claim
You can deduct certain allowable expenses to reduce your taxable rental profit. These may include:
Letting agent fees
Landlord insurance
Council tax (if paid by the landlord)
Maintenance and repairs (not improvements)
Mortgage interest (see below)
Accountant fees
Note: Since April 2020, landlords can no longer deduct all their mortgage interest from their rental income. Instead, you receive a 20% tax credit on interest payments, which may affect higher-rate taxpayers significantly.
3. Use the Rent-a-Room Scheme (If Eligible)
If you're letting out a furnished room in your main home, the Rent-a-Room Scheme could allow you to earn up to £7,500 tax-free per year. This is particularly useful in areas like Tunbridge Wells or Sevenoaks where rental demand is high and space is at a premium.
4. Furnished Holiday Lets (FHLs): Special Tax Rules Apply
Kent’s coastline and countryside have made holiday lets increasingly popular, but FHLs are taxed differently than standard buy-to-lets. If your property qualifies as an FHL, you may benefit from:
Capital allowances on furniture and fittings
More favourable Capital Gains Tax treatment (e.g. Business Asset Disposal Relief)
The ability to make pension contributions based on rental profits
However, from April 2025, the government plans to abolish the FHL tax regime—so planning ahead is essential.
5. Capital Gains Tax (CGT) on Property Sales
Selling a rental property may trigger Capital Gains Tax. In most cases:
Basic rate taxpayers pay 18%
Higher rate taxpayers pay 28%
You’re entitled to a Capital Gains Tax annual allowance, which is £3,000 for 2024/25. After a sale, any tax owed must be reported and paid within 60 days of completion.
If you're thinking of selling, careful planning around timing, allowable costs (e.g. solicitor fees, improvement works), and ownership structure can reduce your CGT liability.
6. Inheritance Tax (IHT) Planning
Many landlords in Kent hold long-term property investments as part of their retirement or estate planning strategy. However, property is fully subject to Inheritance Tax at 40% above the nil-rate threshold. Options for IHT mitigation include:
Gifting property during your lifetime
Putting property into a trust
Using a limited company structure
These are complex areas that require expert advice tailored to your individual circumstances.
7. Should You Use a Limited Company to Own Property?
In recent years, many landlords have considered transferring or purchasing property through a limited company to take advantage of:
Corporation tax rates (currently 25% or lower depending on profits)
Full mortgage interest relief
Flexible income extraction through dividends
However, there are pros and cons—including higher compliance costs, potential Stamp Duty and Capital Gains Tax on transfers, and restrictions on mortgage availability.
This is especially relevant for those with growing portfolios in Kent, where property values and rent yields vary widely by location.
8. Don’t Miss Local Council Changes & Licensing Rules
Several Kent councils have introduced landlord licensing schemes and local tax changes, especially in areas with a high density of rental properties. For example:
Canterbury requires additional HMO licensing in some wards
Thanet and Gravesham have selective licensing schemes
Failing to comply can result in heavy fines—and invalidated insurance—so always stay updated on your local authority’s rules.
How We Can Help
At Soldi Partners Accounting we specialise in supporting landlords, property investors, and holiday let owners across Kent. Whether you're dealing with:
Rental income tax returns
Setting up a property-holding company
Managing CGT on sales
Local licensing compliance
Inheritance tax planning
…we can help you minimise tax, stay compliant, and maximise your returns.
Get in touch today to book a free initial consultation and let’s discuss how we can support your property goals.
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