11:23 AM, 14th June 2023, About 6 months ago
As often discussed on Property118, owning rental properties through a limited company offers full tax relief on finance costs such as mortgage interest and mortgage arrangement fees, access to potentially lower tax rates and flexibility for planning, including inheritance tax. Owning rental properties in your own name, the rental income is added to your personal income and your overall income determines your income tax rate. This means that your rental income can push you over a new threshold, leaving you liable to higher taxes. Click here for the Tax Planning page.
Due to all the different BTL tax changes that have been enforced since 2016, more people are purchasing or converting their BTLs through limited companies. This increase in demand has resulted in more BTL lenders that will accept applications from Ltd companies.
Historically the interest rates for ltd companies were a lot higher than personal ownership. However, due to the increasing popularity of ltd company BTLs, this differential has reduced to a much lower amount. The difference in interest rates will usually be insignificant in comparison to the tax savings that can be made.
The options and choices for landlords using limited companies have never been better.
It is impossible to quote figures until an individual borrower’s circumstances are assessed against lenders criteria, but if you would like to make contact using the form below my team and I will be happy to assist and you may be pleasantly surprised.
Commercial Finance, Development Funding and Bridging Finance