An individual that owns three properties for rental income is concerned that they will not have enough to be financially sound, given the new tax changes to those with properties. Numerous UK residents face similar issues in regards to real estate and taxes. Sarah Davidson offers sound advice to property owners in the given situation, which is to refinance as well as set up a limited liability company in order to keep the tax advantaged situation.
Key Takeaways:
- Buy-to-let investing has become less reliable due to changes in the regulations and taxes used.
- An additional 3% surcharge, toughened underwriting rules, and a requirement for income thresholds for multiple property owners are placing a damper on directly owned buy-to-let properties.
- Due to benevolent changes that are soon to be made in corporate tax laws, purchasing property with a limited corporation may be the way to go, though it can cause additional costs if you already own t
“But by selling properties to a specially set up company, owned by them, landlords can avoid paying tax on these expenses completely.”