In the old days (which was up until about 2 years ago) we had the choice of buying our buy to let investment properties into either a limited company, or our own names, (or something fancy like a trust).
That is unless we were doing something like flipping (buying and selling-on) in which it worked better (from a tax perspective through a limited company.
Now, with the tax changes and the restriction on how much mortgage interest we can off-set against rent to calculate profit, the only real option (at the moment), whether we are buying to hold or flipping, is to buy into a limited company.
That could change if the Chancellor ever sees this as a loophole – hopefully not. But it means that as things stand only a limited company can still off-set mortgage interest against rent.
That is only partially good news.
The downside is that tax will become payable when you try to take your profit out of the company, so the Chancellor will get his tax in the end, so using a limited company does have it’s limitations. And Chancellor, if you read this, that is exactly why you should leave things as they are, otherwise we’ll end up paying tax twice!
The reality is there is no perfect way of owning property, we can only do the best we can.
So, for most of us, it means buying into a limited company, but do talk to your accountant – we all have different financial positions.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
PS. By the way, I’ve rewritten and updated my best selling ebook, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. For more details please go to