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Hi Everyone, 

 

I would really appreciate a bit of advice, as I am looking to get into property investment for the first time and I feel like my head is in a spin, with all the information available and deciding which strategy is best for myself. I currently own a 3 bed semi detached house as my residential property, on my own, which is valued in the region of £145k, however in the near future I am looking to purchase a new residential property with my girlfriend, but I would like to keep my current property but change the mortgage to BTL. Just to add another complexity to it, I was hoping to do this in the form of a LTD company, as I fall within the higher tax bracket and I would like to use any future rental incomes to build within a company format and reduce my tax bill which should allow for a quicker accumulation of my next deposit. So my questions are:

 

1. Will I be able to avoid SDLT for my future residential property as this will be my first home, even though I would be keeping my current house as a BTL?

2. If that was the case, would transferring my current property to a BTL within a company trigger the 3% + 5% SDLT surcharge (£4,750)?

3. Do you have to pay for the legal costs such as searches etc when transferring into a company if you already own the property? Are there any other costs associated to transferring to a ltd?

 

 

Any advice on this would be greatly appreciated.

 

Thanks

Will

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Hi

 

Question one, if you still own the current house when you buy the next one then yes you will face the extra 3% on the whole purchase, not just your share. You can claim this back if you sell the current house within 3 years of buying the new one. This may change if you have even sold a private residence and buy the new one before November 2018.

 

Question 2, when you transfer the current house to a company (possibly before buying the new one to avoid the extra 3% SDLT on new house) then SDLT due on full market value at extra 3% rates.

 

Debbie

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