What Happens If Your Rental Property Makes a Loss?

It is entirely possible that you can make a loss on a rental property, for example if you had a lot of problems with the property or you offered a rent free period.

The tax man does have a heart.  If you own a rental property that made a loss you will not pay tax for that particular tax year and you can carry the loss forward to later tax years and set that loss off against future profits.

If you own more than one property, then you must accumulate all the profits and losses on your properties for the tax year so any losses are automatically used up.  You can’t pick and choose how you use or carry forward your losses!

About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.