01204380038 syddall@pbsyd.co.uk

Landlords ‘prefer operating as limited companies’

8th November 2019

Buy-to-let landlords prefer to purchase residential properties through a limited company, regardless of the size of their portfolio.

Foundation Home Loans (FHL) claimed that 62% of landlords with up to ten properties bought homes via a limited company in the three months to the end of September 2019.

That figure was almost matched (65%) among buy-to-let landlords with more than 11 residential properties in their portfolio.

Around two-thirds (63%) of the 883 landlords polled in September planned to make their next purchase via a limited company - up from 55% in June.

Jeff Knight, marketing director at FHL, said:

"Landlords with large and small portfolios are equally convinced by the limited company model, which has gained a foothold

"It is narrowing the cost margin that previously left landlords choosing to buy in a spouse's name or as an individual.

"Property investors seem more reassured that the limited company structure is a feasible way for them to press on with growth plans confidently."

Prior to April 2017, predominantly buy-to-let landlords with large portfolios were the ones using the limited company business structure.

Individuals with small portfolios tended to borrow money through buy-to-let mortgages and benefit from mortgage interest tax relief.

But this relief has been gradually phased out since April 2017, resulting in rising tax bills for some buy-to-let landlords. A basic-rate tax credit will completely replace it by 2020/21.

Mortgage interest tax relief does not affect buy-to-let landlords operating through limited companies.

Contact us to discuss business structure.

Get it on Google play Available on iTunes

 ICAEW

 

    Iris Logo      2020 Innovation logo 

BAS Logo        ACIE Logo Sage Accountants Club logoVouched For logo KashFlow Quickbooks Pro Advisor LogoXeroFreeAgent