Q&A

Continue renting the house out or sell it after 3yrs/now?

My partner currently rents her old house out whilst she lives now in our joint-mortgage house. I have no connection to the house she rents out and we are not married. She has already been approved to rent the house out for the last 2 years and she is on an “attractive” SVR rate mortgage. We are now coming to the end of her 3yr grace period beyond which if she sells she may be subject to CGT. What is it better to do and why? Continue renting it (currently to friends of ours! How lucky) or ditch it now? She bought it for about 60k, it’s worth about 130k now and she has lived in it for 7 years prior to renting. We would like to take out 30k equity for joint-house modifications whilst still allowing a buffer should interest rates rise sharply and our tenant moves out. At the end of the 3 year period (is that when she moved into our joint house or rented it out?) do we get a Valuation so only pay any CGT on the increase in value of the property when we do eventually sell? Does that make any difference to CGT? Does it matter if she has lived in the house for 7 years prior to renting? Lovemoney is our first attempt at answering this but maybe an Accountant is best? We live in Scotland if that affects anything. Cheers P&F