Buying property through a limited company

The rise in stamp duty has served to compound difficulties facing landlords as one of only the latest measures taken by Osborne to curb property investment in the rented sector. Currently, renting a property as an individual will result in a tax bill on any profit left after they have paid the mortgage interest.  However, if Osborne’s plans to squeeze more income tax out of landlords come into force, landlords and their bank balances will be put under even greater pressure.¹

This has left landlords searching for ways to avoid paying the new stamp duty increase and reduce tax bills by purchasing new properties through limited companies.²

While there has been a rise in mortgage applications for Buy to Let properties overall³, lenders have found the number of enquiries coming from companies as opposed to individuals has increased dramatically, up by 15 percent on October.⁴ Those seeking out a mortgage through limited companies are finding more competitive deals and greater choice.⁵ As demand has grown for these Buy to Let mortgages, lenders are beginning to offer cheaper rates, as intermediaries seek better deals to build longer term relationships with landlords.⁶

Along with the benefits to be gained from borrowing and buying a property through a limited company, there are also additional factors to be taken into consideration. The individual’s circumstances, future objectives and accessibility of mortgage finance to limited companies must all be taken into account.⁷

1. http://www.thisismoney.co.uk/money/news/article-3396573/How-crafty-landlords-setting-companies-dodge-Osborne-s-tax-snatch.html
2. http://www.thisismoney.co.uk/money/news/article-3396573/How-crafty-landlords-setting-companies-dodge-Osborne-s-tax-snatch.html
3. http://www.thisismoney.co.uk/money/buytolet/article-3415394/Buy-let-landords-storming-UK-housing-market-beat-stamp-duty-hike.html
4. http://www.thisismoney.co.uk/money/news/article-3396573/How-crafty-landlords-setting-companies-dodge-Osborne-s-tax-snatch.html
5. http://www.thisismoney.co.uk/money/news/article-3396573/How-crafty-landlords-setting-companies-dodge-Osborne-s-tax-snatch.html
6. http://www.ftadviser.com/2016/01/26/mortgages/end-is-nigh-for-overcharging-on-limited-company-btl-mortgages-A9DYbcEPCNN8f5Ph6fmQ7M/article.html
7. http://www.ftadviser.com/2016/01/19/mortgages/mortgage-products/how-to-side-step-cull-of-buy-to-let-tax-relief-TvfuIjDMMSMrrUHLdrbByK/article.html”>http://www.ftadviser.com/2016/01/19/mortgages/mortgage-products/how-to-side-step-cull-of-buy-to-let-tax-relief-TvfuIjDMMSMrrUHLdrbByK/article.html