What is property income? Property income is any income from land or buildings. Property income includes:
- Renting out property furnished or unfurnished on the business or domestic market
- Furnished holiday lettings
- Letting accommodation within your home to a lodger
- Informal arrangements such as letting a neighbour park their car on your drive or graze a horse on a field you own
It does not include:
- Farming or market gardening
- Trading income from guest house and B&B accommodation
- Rights relating to tolls, mines and quarries etc
Income from hotels, guest houses and B&B accommodation, though it includes a charge for renting accommodation, is treated as trading income because it involves the provision of additional services.
Further guidance can be found on the HMRC website: http://www.hmrc.gov.uk/manuals/pimmanual/PIM1051.htm. If you own property you may also need to consider Capital Gains Tax and Inheritance Tax. Special rules apply if you have lived in the house before or after renting – see the Capital Gains Tax and Inheritance Tax pages for more information.