The number of rental properties owned by a company landlord increased to 20% in the first quarter of 2017, the highest proportion so far recorded.
In the wake of numerous stamp duty and tax changes affecting the UK’s buy-to-let market, landlords have been looking for ways to maintain their profits. Incorporating properties – transferring them into a limited company – has proved a popular solution with some landlords.
Buy-to-let investors have had to face an additional 3% stamp duty surcharge on the purchase of second homes (introduced in April 2016), and changes to mortgage interest tax relief (introduced in April 2017, but being phased in over the next few years), among others.
It’s no surprise that some landlords are incorporating in a bid to help them fund the purchase of other buy-to-let properties. Buy-to-let properties which are owned by companies are exempt from the changes to mortgage interest tax relief – it is buy-to-let properties which are owned by individuals which are affected.
However, incorporating won’t work for every landlord, so it’s important landlords in London Bridge, Bermondsey, Southwark, Borough, Lambeth, and the City make sure they seek professional advice before taking steps to alter the setup of their property portfolios.
Despite landlords being affected by a raft of government measures designed to slow the pace of investment in the buy-to-let sector, demand for rental properties, especially in London, remains strong.
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