Property Glossary

Tax paid on the profit when you sell a property for more than you paid for it, after deducting allowable costs and reliefs.

The annual pre-tax cashflow from a property expressed as a percentage of the total cash invested, measuring the return on your actual capital deployed.

Tax paid by limited companies on their profits, currently 19% for profits under £50,000 and 25% for profits over £250,000.

A certificate rating a property's energy efficiency from A (most efficient) to G (least efficient), legally required for lettings and sales.

Annual rental income as a percentage of the property's purchase price, before any costs are deducted.

An annual fee paid by leaseholders to the freeholder for the right to occupy the land, typically a fixed amount or increasing on a schedule.

A property rented to three or more tenants from two or more households who share facilities like a kitchen or bathroom.

The ratio of rental income to mortgage interest payments, used by lenders to assess whether a property generates enough rent to cover the mortgage.

The mortgage amount expressed as a percentage of the property's value, determining how much you borrow versus your deposit.

The historical ability for landlords to deduct mortgage interest from rental income as a tax expense, now replaced by a 20% tax credit under Section 24.

Annual rental income minus all operating costs, expressed as a percentage of the property price.

A tax paid to HMRC when purchasing property in England and Northern Ireland, with higher rates for additional properties and non-UK residents.

Tax rule from the Finance Act 2015 that prevents individual landlords from deducting mortgage interest as an expense, replacing it with a 20% tax credit.

An annual fee paid by leaseholders to cover the cost of maintaining communal areas, building insurance, and shared services.

Modelling how a property investment performs under adverse conditions such as rising interest rates, extended voids, or increased costs.

The time a rental property sits empty between tenancies, generating no income while fixed costs continue.