Holiday Let through a Limited Company - Help?

[danny62]

Hello Hubbers!

 

We have finally got an offer accepted on a one bed flat facing the sea! We aim to short-term rent it on booking.com and Airbnb.

 

After speaking to two mortgage brokers, there is only one lender who will offer a mortgage to us as a holiday let through a limited company. They are offering an average 3.3% for a two year fixed rate but has £2800 of fees attached to it (property is only £160k). Plus really horrible rates for solicitors which I might be charged twice for (dual representation??)

 

My accountant doesn't really understand about property specifically and isn't super savvy in this area.

 

Does anyone have an idea of what to do for a new business that will be renting through sites like Booking.com or Airbnb? Can anyone give any advise on how to set the company up and any alternative mortgages? I don't want the property to fall through my fingers!

 

Thanks in advance! I truly appreciate any help.

 

[danny62]

Hello again everybody!

I've sought some legal advice and this is what they've told me: 

 

- Holiday lets are not subject to the same buy to let issues regarding using interest as an expense to offset profit. 

 

- Having the property in a limited company would mean profits would be subject to corporation tax, and then further div/income tax.

 

- Getting a mortgage on a holiday let narrows our choice of lenders and came with many other charges (not competitive %, high admin fees, strange legal costs)

 

Therefore we've decided to buy under our names and any profit will simply be taxed as usual income.

 

I hope this has been useful to anyone who's Googled this. If you have any other thoughts that we should consider, please do reply to this thread.

[Lisa b]

Thank you for posting this. Its very interesting. We have just bought a house in a ltd company but letting agent is suggesting we'd get much more revenue if we did holiday lets instead of conventional rental. I'm just weighing up all the pros and cons now. The plan is to remortgage and release capital to buy something else. Looks like I need to get some good mortgage advice. Thanks

 

[Noel Andrews]

On 7/27/2018 at 9:22 PM, lisa b said:

Thank you for posting this. Its very interesting. We have just bought a house in a ltd company but letting agent is suggesting we'd get much more revenue if we did holiday lets instead of conventional rental. I'm just weighing up all the pros and cons now. The plan is to remortgage and release capital to buy something else. Looks like I need to get some good mortgage advice. Thanks

 

 

Hi Lisa, how did your thoughts and analysis go on this?

 

we are starting to consider a Holiday let as would also give us a U.K. base for when we start travelling for 6 or so months of the year. Lots of spreadsheet and costs work to do but intrigued where you’ve got up to.