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Original poster

Should I buy BTL through limited company

10 replies

Dalmore35 · 30/10/2024 23:23

Hello, any advice appreciated.

I’ve seen a 1 bed flat that I would like to buy, nice, popular seaside town, high demand for rentals as not a lot available. Home Report value is £60k. It needs a full refurb in terms of bathroom / kitchen / windows / carpets etc.

I own a home with my partner, and am currently not a higher rate tax payer (but only for next year or so as will be going back to full time once kids are at school).

My question is should I buy the property through my limited company or in my own name? I understand there are tax savings through Ltd company but I’m not planning to buy more than one BTL property at the moment so is it worth the extra hassle?

And if you have any experience of having one BTL - is it worth it at all or better to just invest?

Im just seeing it as an investment opp with the potential of buying another in the future.

thanks

OP posts:
Twiglets1 · 31/10/2024 06:36

Not a great time to become a landlord- are you aware that stamp duty for second homes has just increased in Wednesday’s budget from an additional 3% on top of normal stamp duty to an additional 5%?

DanielaDressen · 31/10/2024 06:41

As a higher rate tax payer I looked into getting a btl both as a limited company and not as a limited company. I just couldn’t really see the sums were going to work. By the time you’ve factored in money for repairs, letting agency, finding fees, insurance, electrical and gas inspections, potential dead time between tenants if they leave and then add in the risk of non payment . Now there’s the added stamp duty it’s even more unattractive. Which to be honest i think is good. Hopefully prices will drop soon if less people buy btl and first time buyers might have more chance.

Twiglets1 · 31/10/2024 06:45

DanielaDressen · 31/10/2024 06:41

As a higher rate tax payer I looked into getting a btl both as a limited company and not as a limited company. I just couldn’t really see the sums were going to work. By the time you’ve factored in money for repairs, letting agency, finding fees, insurance, electrical and gas inspections, potential dead time between tenants if they leave and then add in the risk of non payment . Now there’s the added stamp duty it’s even more unattractive. Which to be honest i think is good. Hopefully prices will drop soon if less people buy btl and first time buyers might have more chance.

Yes I hope the higher stamp duty leads to a few less buy to lets tbh leaving more homes available for first time buyers.

Turefu · 31/10/2024 06:48

Government has been making harder for landlords for the last few years and many of them sell. It didn’t make properties cheaper , just rents went up badly and it’s so much harder to rent something sensible.
Buying through limited company can be a good option. Speak to the professional first.

HellsBalls · 31/10/2024 07:01

@Dalmore35 surely your business plan would show you the best option?

Bjorkdidit · 31/10/2024 07:45

Wouldn't this be a better question for your accountant rather than Mumsnet where you're going to have to pick the right answer out of several that are wrong, plus all the inevitable hatred of private landlords posts?

But I'd be wondering if a 1 bed flat in a 'nice, popular seaside town, high demand for rentals' truly is worth only £60k. After all, a proportionate, high street quality refurb of a small property isn't going to cost more than £20k or so is it?

Is the £60k the 'guide price' that bears no reality to what the property will sell for? Or is it in a block with 'issues'/high service charges etc?

Are you looking to rent it out as a home or a holiday let? Are there any restrictions either way?

Original poster
Dalmore35 · 31/10/2024 08:58

Hello,

Thanks for the replies. I do know that rental return is low when you take into account stamp duty / maintenance / letting fees etc but I’m hoping the capital return when I sell in 20ish years will make up for it. I’m in Scotland for info.

My accountant says go through my Ltd company which I think it the best option but just feels a bit daunting so was interested to hear other people’s experiences.

OP posts:
PoorLion · 17/03/2025 08:23

Will this be a cash sale or mortgage? This makes a big difference. If the latter then you count mortgage payment as part of the running costs and therefore not paying tax on that part of the income, however normal mortgages are not available, speak to a mortgage broker

caringcarer · 17/03/2025 15:58

I'm an experienced LL with 11 btl houses. The older ones are in my name and newer ones in LTD company name. If you think at any point in time you might be a 40 percent tax payer then do ltd company if not then it makes less difference. If you already have a ltd company then obviously put it through that.

HappiestSleeping · 17/03/2025 16:01

Twiglets1 · 31/10/2024 06:36

Not a great time to become a landlord- are you aware that stamp duty for second homes has just increased in Wednesday’s budget from an additional 3% on top of normal stamp duty to an additional 5%?

Edited

Additional stamp duty wouldn't be payable if done through a limited company though as it wouldn't be a second home, it would be owned by the company.

@Dalmore35 you need to see an accountant. There are also ways to link this in with pension for further tax incentives.

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