14 Apr

Landlords seek to offset tax change

Landlords seek to offset tax change

There has been a rise in the number of UK landlords purchasing property via a limited company as they see to offset tax legislation changes.

Figures from Countrywide suggest the proportion of homes to rent are owned by a company landlord is now at 20 per cent during the first three months of the year.

It is thought the increase is a result of changes to tax relief on mortgage payments which came into force at the start of the month.

However, landlords need to be aware that buying a property as a limited company can be more tax efficient, but this is not always the case and property investors are advised to make sure they seek professional advice.

“The number of rented homes owned through a company is up. The incoming tapering of mortgage tax relief is likely driving the increase. Companies are generally taxed more favourably, particularly with recent changes by government to tax relief, so in many cases landlords can make cash savings by operating through a company rather than as an individual,’ said Johnny Morris, research director at Countrywide.

“Rents fell again in March, mostly driven by falls in London. Stock growth continues to outpace demand in the capital, giving tenants more negotiating power, pushing down rents. In much of the rest of the UK rents continued to grow, although at a slower rate.”ADNFCR-1222-ID-801834767-ADNFCR

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