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  • Buy-to-Let

    Couple of general questions

    If you have never owned a property before and buy a property through a company, do you retain your first time buyer benefits?

    Can a HMO / Buy to Let  be put into a pension? or is it just commercial property?

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    question 1 yes
    question 2 no
    deb
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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    Debbie the Limited Company would still need to pay the 3% Stamp Duty surcharge though wouldn’t it? So the first time benefit is lost here
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    So are you saying it would be possible to invest in property with a few other people through a company, but when you come to buy your own live in residence, you'd still be able to use your Help to buy ISA, and 0% stamp duty to £300,000?

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    This is what I have done to buy a property with my daughter. We both own shares in the company and she retains her FTB status. The shares she owns don't effect her eligibility for a student loan whereas owning a property directly may have.

    The company didn't pay the additional 3% stamp duty as it purchased a mixed use property - an option if the SD bothers you.

    Before you get too excited about stamp duty benefits take some qualified advice on other taxes, especially those that you pay when extracting profits.

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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer

    a company will always pay the extra 3% but for stamp duty you would still be a first time buyer
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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA

    In which case, a key tax benefit of being a first time buyer is lost? Agreed? Depending on the price of the property, any other benefits could be more than offset by having to pay an extra 3% on the price of the property.
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    but almost always a clients home is of greater value than a btl
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    Debbie Franklin

    Director of Tax Peplows Limited

    CTA ACA FCCA


    Hate to disagree with @debbief but no. Many of the benefits set out by the government such as Stamp Duty (SDLT) relief for first-time buyers and Help to Buy (HTB) is not available to those who own property in a Limited Company.

    In addition, your property purchase in the Limited Company will pay the 2nd Home Stamp Duty (SDLT) at 3% higher than normal rates.

    Mortgage Lenders may view it differently and take the view you are a First Time Buyer.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________


    Hi Adam, sorry I didn't phrase it very well. I want to get a buy to let through a company with a few friends, but do not want to use my first time buyers benefits. When I come to buy my first home for me to live in will I still be classed as a first time buyer?

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    In that scenario, you will lose many of the First Time Buyer benefits such as SDLT relief and Help-to-Buy.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________