You are here: Home - Mortgages - Buy To Let - News -

Landlords move quickly to avoid tax hikes

0
Written by: Christina Hoghton
03/12/2015
There has been a huge rise in landlords registering as limited complanies so they won't be liable for higher taxes targeted at buy-to-let borrowing.

Changes to the tax treatment of landlords have already triggered a surge in landlords borrowing through companies, and this will be boosted by tax changes announced in the Autumn Statement, according to a buy-to-let report published by Kent Reliance.

It said that changes announced in the Budget, lowering the tax relief for mortgage interest payments for landlords from April 2017, have already caused an increase in the number of landlords seeking to incorporate – in other words form a limited company through which to buy and hold properties.

Kent Reliance saw applications from limited companies surge immediately after the July Budget. This has accelerated as landlords absorbed the impact of the tax changes; in September, applications tripled year on year (+213%). One quarter of all buy-to-let mortgage finance demand is now through limited companies, up from 13% a year ago.

More to come

Following the Autumn Statement, the Treasury is consulting on whether corporate entities with over 15 properties would be excluded from the newly announced Stamp Duty surcharge, an exemption that will add further incentives for professional landlords to incorporate, boosting demand.

Andy Golding, chief executive of OneSavings Bank, which trades under the Kent Reliance and InterBay brands, said: “The Chancellor has trained his sights on buy to let, given the sector’s rapid rise in value, but the changes to the tax treatment in the last six months will bring unintended consequences.

“First, the rush to put properties inside a limited company will be sustained, especially if larger scale investors are indeed exempted from the new Stamp Duty surcharge. Secondly, the buy-to-let market will see activity hit overdrive between now and April as landlords seek to beat the Stamp Duty deadline.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week