X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Tax

    Should I buy property through Ltd Company?

     Hi all,

    My curren situation is i have just had a offer accepted for a house. As I have one house with a mortgage in my name, this will become my second house. So this will mean, I will have two homes in my name with two mortgages. My wife also has a house in her name with no mortgage remaining. My father has a house in his name with no mortgage but he ideally wants to put that in my name in the near future.

    I will have two homes which I will rent out in the short term with possibly my fathers house a third although this is long term.

    My question is it worth purchasing this house now as a limited company and if so what would be the benefits? Would there be more savings or should I do this once I have all three homes? Also my long term plan would be to give all the properties to my children.

    Thank You

    0
    0

    Personally, if it's one property you're buying then I can't see any point in going Ltd. I spoke to my accountant regarding this matter and she told me that on my first buy as a ltd company I may end up being worse off.

    When you buy a second property with a value of £125,000 or below that holds a penalty of 3%, anything above that is at 5%.

    You don't have to pay these extra rates when registered as a ltd company, but you pay a higher rate of interest on your mortgage. For me, at 3% it works out cheaper and having access to the lower interest rates.

    Hope this makes sense.

    0
    1

    I think you may be mistaken here, or have a read it wrong?

    The extra SDLT does apply to Ltd purchases the same as it would personal.

    0
    0

    Landlord with 25 years’ experience in the property market and a specialist in tenant referencing, ID and credit screening. Creator of identity, credit and anti-money laundering system ValidID.co.uk

    You really need to seek professional tax advice, as the answer is very specific to your situation and personal circumstances.

    However, this thread may give some direction:

    The BIG tax issue: Should I incorporate?

    1
    0

    Do as Vanessa suggests you will pay the additional second property SDLT of 3% however you purchase including a ltd co

    1
    0

    I have found that I will be better off buying through a company format, you may be worse off. As Vanessa has stated the answer is very specific to your position.

    I would add to that not to limit your considerations to the tax benefits but to compare all advantages/disadvantages. As you are considering your children also take some advice on succession planning as this is likely to influence your decision.

    0
    0

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

    Martin H. Fischer