First HMO property but what about the future?
I’m in the process of purchasing my first HMO property and need some advice on purchasing in my sole name, or through an SPV company as I understand the interest relief will soon be gone for sole investors along with other changes.
What if the same reliefs get changed for limited and SPV companies? Or I may be stressing over nothing.
I do plan to purchase more HMO/BTL properties in the future but don’t know if I should start by registering through a company.
I hope someone can advise me what to do..
Thanks in advanced.
Runju
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Member Since February 2011 - Comments: 3453 - Articles: 286
10:32 AM, 26th September 2016, About 10 years ago
Hi Runju,
The vast majority of new BTL purchases are now done in Ltd Co. names as more efficient tax planning.
However, technically anything is possible in the future.
Future new tax rules are therefore an unknown variable that you can’t plan for, and you can’t worry about what you can’t control other than not investing in the first place.
Member Since December 2014 - Comments: 11
10:39 AM, 26th September 2016, About 10 years ago
Hi Neil,
Thank you for your reply.
Is there a lot of complications if I want to take it out of a company in the future?
Aploagies for the silly questions, this will be my first HMO and want to get things right.
Member Since February 2011 - Comments: 3453 - Articles: 286
10:46 AM, 26th September 2016, About 10 years ago
Hi Runju,
You want to start with the purchase in the Ltd company if that is the long term plan, because if you change your mind or convert later you are then exposed, remortgage costs, Stamp duty again and possible CGT. However if you then have to take it out of the ltd company you will then get personally taxed along with other potential costs.