For some landlords, the upcoming tax changes will mean a substantial reduction in net profit; some may even go from profit to loss. But it is not just higher-rate taxpayers that will be affected; some basic-rate taxpayers will lose out too because the changes could push them into the next tax bracket. For many landlords in this position, the solution has been to switch to a limited company structure that attracts corporation tax (which is lower and charged post-interest deduction) rather than income tax. Brokers that have not yet done so should take the time to understand the limited company buy-to-let structure; this is essential knowledge as the buy-to-let sector is changing rapidly. Range of products: Borrowing options in the sector are increasing daily and data shows that, in the first half of 2016, 45% of lenders offered products to limited companies. Even better news shows 20% of all buy-to-let interest rates were available to limited companies thus proving lenders are taking on board landlord’s demands. Over 50% of buy-to-let completions are now made using corporate vehicles, if we factor in re-mortgages the figure falls to 28%. This is a large increase on business conducted for the same period last year and figures are rising fast. Can we help? If you are looking for a new or re-mortgage please do make contact with one of our fully qualified advisers who will be happy to assist.
