Lee Sharpe looks at some of the tax implications of converting a large property into a house in multiple occupation.
In the previous case study in this series of articles, I looked at what happens when extensive repairs are required following a long period of letting. In this case study, I will look at what happens when a landlord decides to convert a standard single-family dwelling into a house in multiple occupation (HMO).
Case study 5: HMO project
Sean has a large Edwardian townhouse that he has let for some years as a single dwelling to a tenant who has just vacated the property. He decides to convert the property into an HMO capable of being occupied by five separate tenants. The property will require some extensive remodelling, and he gets his usual builder to quote for