Mortgages for Buy-to-let limited companies now make up 1 in 4 of products
The proportion of buy-to-let products available to limited companies increased during the last quarter of 2017 from 21 per cent to just under a quarter of all products, new data from Mortgages for Business has revealed.
Average rates for these mortgages rose slightly in the period due to the introduction of additional five year fixed rates.
Nearly 75 per cent of buy-to-let mortgage transactions made by landlords operating via limited companies are being used to buy property rather than for refinance purposes.
Steve Olejnik, COO at Mortgages for Business, said: “To help landlords determine whether using limited companies is the right strategy for them, we’ve been encouraging our clients to take professional advice.
“We will also continue to produce guides and webinars which explain how the tax and regulatory changes might impact their investments.
“The landscape of buy-to-let is changing and it’s important that landlords are equipped to traverse the terrain.”
Indeed, going incorporated might not be the right choice for everyone. One of Simple’s guest bloggers, Tony Gimple of Less Tax for Landlords explains: “Incorporation is in some ways the path of least resistance (most high street accountants and even some property specialists see this as the right way to go), but you should please note that we do not generally believe that full incorporation or one via a temporary LLP (used if you can’t truthfully claim S162 relief as you’re not actually working 19 hours a week or more IN the business), makes commercial sense.”
Tony’s advice is to look at your individual circumstances, and see how you can restructure your finances to be as tax efficient as possible. Read his blog here.
It’s worth noting that most of the buy-to-let purchase transactions made through limited companies were related to additional property acquisitions, although the figures also include landlords selling property they already own personally into a corporate structure.
All transfers of properties from individuals to limited companies must be treated as a new purchase, and as such will not qualify as a remortgage.