Did you enjoy this? Please share with others 🙏🏾. Comment below if you have more questions 😀 Learn to invest in property as a beginner UK (Buy-To-Let, HMO, Rent-To-Rent strategy, etc ): financialjoyacademy.com
This is one of your best video I must say. This guy is not holding back any information. I really appreciate your honesty and exposure to property investment
I was old enough during the early 2000 property era when the government encouraged second property ownership as a sort of backup pension. Today the government have aggressively moved the goal post by taxing BTL reducing the margins then my favourite (not quite ) managing tenants. I use an estate management company that take a percentage of the earnings plus expenses for maintenance work, regular certifications such as electricity and gas certs annually . Oh don’t forget the insurance as a tenant can potentially live rent free in any eviction proceedings. What a ball ache, but capital gain is soothing. I am done with UK property, property abroad has its own risk such as political instability in some developing countries but I have no tax liability whilst making a decent passive income annually. REIT is my 2022 strategy as I can’t deal with estate management or tenants but love the treat of capital gains. BTL is good but it is too much hassles, it still have a vital place in any meaningful portfolio. Ken da living legend, I salute you for spreading financial knowledge like a virus! I wish I caught the virus in my 20s 😅
Great content couple of points the additional stamp duty at 3% for second homes needs to be factored in especially for those who look to BTL before purchasing there main residence. Another issue for some is transferring properties you already own into your BTL business can be complex and expensive. Some accountants are saying that BTL businesses are actual businesses but SPVs to avoid tax so don’t be surprised if HMRC look at these schemes
Great video, This came at a perfect time for me! I'm 19 and have been watching you for over a year and hope to get a mortgage my first property by the end of this year. I also operate as a sole trader at the moment so this really gave me some super helpful insight into potential options in the future for me. All love !
Its great to hear a young person looking to buy a property! You probably already know this but I thought I'd say anyway that 5% deposits are available until the end of the year, could be worth looking into! Happy hunting
Great video gentlemen and very informative for the first time property investor. Just one point not mentioned by your friend in the initial explanation on buying through a limited company. Unlike a residential mortgages your usually required to have 25% deposit when buying a buy to let. Quite different to 5% or 10% on a residential mortgage.
Hi there! I must preface this comment by saying this is in no way definitive or from experience, but rather some research and legal knowledge. I thought I’d share my two cents. I don’t think you would forgo your first time buyer privileges. A limited company is a separate legal person in law, so ‘you’ do not ‘own’ that property. If you were to buy your first property (BTL or Residential) in your name, you will be treated as a first time buyer, even if you have previously bought through a company. i.e. using stamp duty as an example 1. First Time Buyer / LTD Company / BTL = pays stamp duty. Then wants to buy a residential property in their own name = no stamp duty. 2. First Time Buyer / Buying in their own name / BTL = doesn’t pay stamp duty, has first time buyer privileges 3. First Time Buyer / Buying in their own name / Residential = doesn’t pay stamp duty, first time buyer privileges I’d love to know what others think…
Really interesting video, Ken. Currently, my savings go in etfs/index funds in a pension and an S&S ISA. I was considering property investing in BTL property to diversify. In addition to diversification, BTL has a massive leverage advantage even with interest rates slowly beginning to increase. However, the limited company advantage is not as simple as comparing 40% income tax rate for a higher rate tax payer to a 19% corporation tax rate. To make a like for like comparison, we will need to add the dividend tax as well which will be 33.75% soon. So 19% on profits and 33.75 on profit after tax is not materially different from paying 40% if you had the property in your name even if you allow for mortgage interest deduction in a Ltd company. My two cents worth is that there is no real tax advantage if you're taking income out of the company. However, if you treat the income as pension and take it when you have a lower marginal tax rate, 8.75 will trump the 20% your pension will be taxed at.
I agree with your 2 cents. For higher income tax earners the Buy to Let strategy through a limited company is mainly (I'm tempted to say "only") beneficial if it's your pension plan or for some future low earnings period.
Thanks all I'm starting to plan for retaining and renting out my first time home (flat) so can move to a home with partner and was seeing if was better to sell it to myself as a LTD company.
Other advantage would be taking £40k/year from the business account and contributing into your pension account (SIPP). That would be a company expense and therefore would not have to pay corporation tax. This money could be invested and would be accessible during retirement, with a 25% lump sum tax free and income tax due in the remaining amount. Sounds like a decent benefit to me.
Loving the content and the variety you have been sharing already this year!! Qq - If I don’t have any properties under my name, but have a LISA. Could I use a LTD to buy rental properties whilst I look to buy my own residential property in the future using my LISA
Just for info, changing the company director of a company, does NOT pass ownership of the company assets to another person. This can only be done by transferring share holding. This can carry a veryl hefty tax liability depending on the value of the business. Please get proper advice before looking at doing this. It's not as simple as your guest makes it sound.
Can I transfer my personal residence house into company buy to let? So I can take extra money out from the property and buy personal property for myself.
Hi this such a great video. I have a mortgage on my home and was curious about btl. Is it possible to remortage my home to get the deposit for the btl? I've also heard there is something called let to buy , is that popular with people?
What a fantastic video ! If l may ask please ? Is one able to transfer their second property (with a small mortgage remaining ) to a limited company ? Also could l also please ask if there are accountants that specialise in property acquisition? Thank you
Great video as always, I'm about to register my side hustle as this year I have made almost 9k in sales. My question is how do I choose the name? Does it has to reflect on what I sell? Can the name be changed in the future?
Such a good video!! I wonder if you can help me figure out a way out of a real pickle I’m in with my property? I bought a flat in Manchester 6 years ago with help to buy as a first time buyer, & have had to move due to life changes after covid but can’t sell my flat because I’m effected by the ‘cladding issue’ 🤦🏼♀️ I was able to arrange to rent out my flat & have moved home to stay with family in South Wales. So I’m stuck with a flat I can’t sell for possibly another 3 years but I’m wondering if this ‘buying a house through a limited company could be a way to get my own place again? I know that’s a complicated question & I don’t fully understand it myself 🤔 Just wondered if you could help with advice xx
This is the most informative video I have come across relating to property investment, so many of my questions have been clarified and answers to questions I didn't know I had. I am grateful to both of you, thank you for sharing valuable information that I can use.
A very good video! I’ve done it slightly backwards. I’m set to complete on my first rental in Northern Ireland whilst still living with family in England. Keep up the brilliant work 👏🏽👏🏽
Hi I'm 44 and in the process of purchasing my 1st property! Due to my gf withdrawing her interest in going in to the home buying process 50/50 I had to go for a 35% share of a new build apartment. My plan is to quickly purchase 100% of my property rent it out than buy a bigger place. My questions are will I need to put down 25% of the complete property value and get a buy to let mortgage before being able to get a mortgage to purchase another home?
Hey great video, i wanted to share my situation at hand to establish if i would be in a good place to do something like this myself, Im a self employed one man band and have just sold my first home so im looking to buy the second property outright with no mortgage via a ltd company.. is it a case of opening a ltd company and lending the company a mortgage myself to buy a buy to let and then look to get payments from the company possibly with interest... so essentially filtering the monthly rent via monthly mortgage payments ? Or just keep it in the company and withdraw it via dividends
Such a great video! Is it possible to buy your first buy to let as a first time buyer and opt in go pay the ‘additional rate’ to avoid paying it again in the future for a residential home and then just pay standard for that?
Question about the corporation tax. You mentioned you pay 19% but I assume this is on all income? Whereas buying in your own name you'd only start paying tax at 20% after you exceed the basic rate threshold (something like £12,750). Can you clarify this for me?
@@TheHumblePenny So a bit of maths to do but unless you're buying multiple investment properties the additional expenses to declare and 1% tax saving is unlikely to beat the tax free allowance (depending on your other income sources). But, I can see how this option would be more clearly beneficial for higher rate tax payers.
I was wondering, I put in a offer on a house, which was accepted, the vendor states there still looking to buy a property, waiting for one to come to market. The vendor states they are happy to move to there parents house, if not found anything in time so I can move in. Is there anyway this can be pre agreed legally that they would need to vacate, even if they have not found a property
