Can I use equity released to pay for my new residence?
I have inherited two properties and let out our main residence and moved to a bigger new property. My wife and I have setup a property rental company. We have remortgaged all three properties on a repayment basis to pay for the deposit and pay our mortgage on our new property. Can I write off the interest payments on the three properties against my rental income and can I use the equity released from the properties to reduce the debt on my new main residence?
Arthur Weller replies:
If the value of the loan on the property is not more than the value of the property when you started to rent it out, then all the interest is an allowable expense that you can offset against your rental income. Furthermore you can use the borrowed money for any personal purpose, like paying for the deposit and mortgage on the new house you are now living in.
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