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  • Tax

    Best way to sell my property to pay tax bill?

    Hi all,

    My accountant has told me what my self assessment tax bill is going to be in January, my dilemma is this, the only way i am going to be able to afford the bill is by selling one of my Properties to release the equity.

    With just 3.5months before the bill is payable, can i ask which method of sale would you recommend, high street estate agent or auction? If the agency route, how long should I give it and does anyone have any tips?

    If auction, anything to consider, how can I maximise the selling price? Local auction or national auction? Auction room or online auction? Cheers

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    Auction. Once sale is agreed much harder to back out and has to complete in 30 days. Maximise your price by marketing as you would with an agent. Clean, do snagging etc but if you need to selll you need to sell. So price it low. You have to ask- what happens if you can’t/don’t?


    best of luck

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    Well can you remortgage a property with the equity you have. Try borrowing from your bank . If using a estate agent don't tell them you situation otherwise they just push the selling price down to get a quick deal done. Could use on line sites. Finally the auction is an alternative.

    If you find a buyer don't forget you can always get exchange and completion done on the same day or within a few days if time is running out. If going down the auction route don't forget to leave a reserve either fixed or with discretion.

    Another way is to get the agent to go to sealed bids with min. price - tha'ts when several parties are keen to buy and saves time.

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    May I ask if the tax bill is more than you expected?  If so, is that down to Section 24 or some other issue such as a capital gains liability?

    Is your accountant specialised in property tax?  Have they claimed all the expenses and allowances you are entitled to?

    If the property is performing well, it seems very drastic to have to sell it.

    Have you considered paying your tax bill in instalments?  You will incur a bit of late payment penalty and interest, but it might be possible?

    If you must sell, then auction or selling to a professional property cash buyer is the only guaranteed solution, although you will likely get a lower prices.

    Putting it with an estate agent in the current market conditions means that it might not sell for many months due to Brexit uncertainty.

    You could also sell it tenanted on the Vesta platform, meaning that you would earn rental income up to the day of sale.


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    Cautious LL,

    some things to consider.

    1. Do you have a mortgage, and might a sale result in your provider exercising their right to consolidate? If so, you may not have any proceeds left from the sale to pay your tax liability.

    2. Will the sale of your property trigger a CGT liability, and will you have sufficient funds remaining from the sale to pay both the income tax and the capital gains tax?

    3. Has you accountant included the first half of next years bill in the January payment (as required) or just the figure he’s calculated for the self assessment.

    Where in the U.K. is the property? Have to ask, and sorry to be blunt, but how did you fail to see this coming?

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