More buy to let mortgages being held by limited companies.

An increased number of buy to let mortgages are being held by limited companies, according to property market analysts.

Major tax changes, being introduced from April 2017, mean that private landlords will no longer be able to deduct mortgage interest from their tax bill. Their gross income, including rental incomes, will be used to calculate a tax rate instead.

The changes mean that some landlords will become high rate tax payers and, to many, this an unpopular outcome. To avoid this, landlords are incorporating as a limited company.

The reasons are twofold:

• Mortgage interest remains tax deductible.
• Corporation tax is charged at a flat rate of 20%, reducing to 17% during the next 5 years.

These incentives mean that, despite the challenges, many landlords are being creative by seizing the opportunity to increase their ROI. You can do this too by seeking expert buy to let mortgage advice from the UK’s mortgage broker of choice, Deal Direct.

Please be aware that whilst we are regulated to offer independent mortgage advice by the FCA, we are not regulated to offer independent financial advice. To discuss whether property is suitable as an investment, please contact an independent financial adviser for guidance.

Please note: 

Buy to let mortgage applications from:

• applicants whose intention is to benefit from house price growth
• applicants whose intention is to benefit from rental income
• applicants who are letting to buy

will be treated as normal buy to let and not as a consumer buy to let. In addition, their subsequent remortgage applications will also be treated in the same manner.

For expert buy to let mortgage advice, call 0800 048 8828.