R0 Exam Prep

R02 Property: free practice questions

5 free questions on Property, part of learning outcome 1 (Asset classes). Pick an answer to check it, or open the answer to see why each option is right or wrong.

  1. Question 1 of 5

    Why does commercial property have some of the characteristics of fixed-interest securities?

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    The answer is C: Tenants must keep paying the rent even when they make a loss

    Commercial tenants have to pay their rent even when they're loss-making, giving a bond-like income stream. But if a property becomes vacant and no tenant is found, it can become a drain on resources.

    Why the other options are wrong

    A
    Property values don't move like that.
    B
    Property has no redemption value.
    D
    Rent is set by the lease, not the DMO.

  2. Question 2 of 5

    Which of the following are drawbacks of direct residential property investment? 1. Buying and selling are costly and slow 2. A property can't easily be sold in parts 3. Void periods can interrupt the rent 4. Its value is unaffected by the local economy

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    The answer is D: 1, 2 and 3 only

    Property is costly and slow to buy and sell, can't usually be sold in bits to boost income or use the CGT annual exempt amount, needs active management and carries the risk of void periods.

    Why the other options are wrong

    A
    The local economy does affect values; that isn't a drawback in itself.
    B
    Statement 4 is wrong: local conditions affect property values.
    C
    Being unable to sell in parts is also a drawback, for example to use the CGT exemption.

  3. Question 3 of 5

    A home mover in England buys a new main residence for £400,000, having already sold their old home. How much SDLT is due?

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    The answer is C: £10,000

    0% on the first £125,000; 2% on £125,001 to £250,000 = £2,500; 5% on £250,001 to £400,000 = £7,500. Total £10,000.

    Why the other options are wrong

    A
    That applies the additional property rates, which don't apply to a replacement home.
    B
    That charges 5% on the whole price.
    D
    That charges 5% on everything over £150,000 instead of £250,000.

  4. Question 4 of 5

    A buyer completes on a new main home before selling their old one, so pays the higher SDLT rates. How can they recover the surcharge?

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    The answer is A: By claiming a refund if the old home is sold within three years

    The extra 5% isn't due when replacing a main residence that's already been sold. If the old home is sold after completion, the higher rates apply, but a refund can be claimed if it's sold within three years.

    Why the other options are wrong

    B
    A refund is available if the previous home is sold in time.
    C
    The refund depends on selling the old home within three years.
    D
    Letting the old home doesn't trigger a refund.

  5. Question 5 of 5

    Two joint owners each receive rent from letting rooms in the home they share. How much rent-a-room relief does each get?

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    The answer is C: £3,750

    There's one £7,500 exempt amount per residence. If another person also receives rent from letting in the same property, each gets £3,750.

    Why the other options are wrong

    A
    The £7,500 is shared between them, so £3,750 each.
    B
    £1,000 is the property income allowance.
    D
    There's only one exempt amount per residence.

Practise all 24 Property questions

These are 5 of the 24 questions on this topic in R0 Exam Prep, and the full R02 bank covers every learning outcome. Practise free, track your weak areas and sit timed mocks.

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