Insurance News Archive

Buying, renovating then selling 'not easy money'

Investors in the UK have regularly looked to bring old houses or commercial properties back into the market, but a property analyst has warned that this is no longer "easy money".

The chance to buy neglected property at a low price and bring it back to the market for a healthy profit has been an attractive idea in theory, but property magazine Homebuilding and Renovating has suggested that many people are not aware of the tax issues involved.

Homes, offices, shops or factory space being renovated and then quickly sold incurs hefty capital gains tax bills, reducing the profit which can be earned through the doing up of property

"There are elements which make it [renovating] not quite as attractive as people might think," said the magazine's editor Jason Orne.

"The danger is that people do view it as a way to make easy money and don't see the financial sting."

Part-time or casual investors may still find renovating an old property a profitable and rewarding experience, however, as Mr Orne pointed out that homes which the renovator lives in for a time afterwards are given relief from capital gains tax bills.

31 Jul 2007