How Are Landlords Planning to Save BIG TIME

How Are Landlords Planning to Save BIG TIME

How Are Landlords Planning to Save BIG TIME

  • Posted by Nellie van der Walt in blog, News
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With the Tax Season still fresh in most landlord’s minds, many have started implementing plans to avoid the dreaded tenant tax. According to a study by Precise Mortgages, in the next 12 months, 2 out of five buy-to-let landlords will rather use limited companies to acquire properties. This is opposed to just over a quarter as individuals.

In light of the high taxation, as many as 38% of landlords are planning to set up a buy-to-let limited company to avoid rising tax bills. This compares to only 28% purchasing properties as individuals which highlights the change in the market.

42% of portfolio landlords, defined as an individual owning four or more mortgaged properties, intend to buy any new additions to their property portfolio via a limited company. This is mainly because of the new mortgage requirements. 31% of landlords who own up to three properties plan to set up a limited company.

The landlords most likely to purchase properties through a limited company are largely based in London according to the study.

Alan Cleary, managing director of Precise Mortgages, commented: “Buying property within a limited company structure has become increasingly popular, particularly among larger professional landlords.”

Another surprising find is that 89% of brokers are expecting the number of landlords who buy through limited companies to rise over the next 12 months.

“Given the predicted rise in landlords switching to limited company status this year, we can expect this trend to continue,” Cleary added.

Still not sure what this all means? Read our previous blog post on the Dreaded Tenant Tax and What You Can Do to Save Money.

If you need any advice on your tax situation as a landlord, we’re here to help. Feel free to phone us on 01633 265222.

Comments 3

  • Emma Metson

    I am all about saving money. Taxes can become quite ridiculous if not handled correctly that I know from personal experience. This idea of creating a company to manage my rental property looks promising. Thank you for sharing! Are there any risks in using a limited company to buy and let properties?

    • Luscombe & Co

      The main thing to look into is who the properties are passed over to should anything happen to the noted director if the properties are in a limited company. The assets to not pass over as they would in a normal case and would need to have named signatures listed. I would recommend contacting an expert within the field to discuss the best way in which to do this and to make sure that this is the best option for you.

      Kind regards


  • Emma Metson

    Wonderful information. Thanks again for the advise Penny.

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