Should you buy property in a Limited Company? Property Investing for beginner. Buy-to-let accountant 

Just found the video that I was looking for! Perfect, thanks Justin!

Hi Justin Thank you for doing something that very few people do in videos like this - identifying key subject areas of interest in the video rather than having to listen to everything.

This is such a great video! Loving the videos you put out!

Just want to say thank you for you consistent video uploads, I only discovered you about a week ago and have binged a lot of your videos. Good to see your channel is growing and your reaching more people! I subbed at just under 4K and now you’re almost at 4.6k! Keep up the good work!

Great video mate. Fair play for filming this 💪🏻

Clear and concise video! Appreciate the help Justin, also thank you to Peter. Keep up the good work gents!

Very informative! Great knowledge Peter and great examples! ☺️

Great videos man, refreshing to see a genuine person sharing truthful and resourceful information in this field. I’m 22, from Scotland and looking to invest in property soon. Cheers 👍🏻

Really good video Justin 👌. I have just bought two properties and have been worrying about this for ages. Most RU-vidrs go on about the massive portfolios not us beginner's. 👍

Lots of great information and very well explained so any person can understand it easily. I learnt a lot. Thanks and keep up the great work!

Perfect video! Thanks, useful information

Literally came across your channel today and it's made for a lovely Sunday Afternoon Binge-watching session, also gave me the boost and confidence I needed to make a start! Thank you and keep delivering such great content!

Thank you for sharing this information it has answered a lot of my questions

This is actually really useful as a 15yr old. I aspire to have a multitude of business ventures and also become an accountant. Just stumbled upon your channel about 3 days ago and its great.

So useful!! Lots answered

Very informative 👏 thank you for this as it came on my feed via recommended.

Brilliant, great video again Justin 👍🏼

Excellent video. that answered a lot of questions I've been wanting to know thank you

good stuff. clear and informative. thanks

Great video!! Excellent questions!

Fantastic advice!!

Great video Justin. I always wanted more information on limited company. Keep it up.

Great video. Not often you see this sort of video on RU-vid. Very informative

Great video, looking to get my first BTL. This was really useful- thank you

Just subscribed after watching your video first time. I have been able to understand section 24 .I have been wondering whether to go LTD or otherwise ,now I can make an informed decision. Thank you so much for simplifying this to such a level. Very impressed

New Subscriber here...some great content on your channel. In particular this video is very informative. Your questions are on point and Peter has done a fantastic job in explaining these processes. Thank you for educating us. Wishing you success with your channel.

What excellent information, thank you!!

Damn. RU-vid must be reading my mind. Very much needed video

Great video Justin!

Very useful the way you broke down the question and split the video, instead of wasting any body's time. Thanks

Brilliant, this is just what I was looking for

Top Video addressing a 🔑 question that every property investment starter is asking themselves. Thank you 🙏

Very good information man!!! Keep it up 👍

Great video. Keep up the good work. Because of you I'll be buying a property in Liverpool too. Thanks for the great work ;)

Great value in this content. Thanks

Really helpful 👌 Thank you.

Such i nice video. Lots of info. Thank you for sharing

Your RU-vid channel is full of gems. Thanks alot for your content 🙏

Very informative thank you for your content, it help us first time buyer

Great advice, your accountant is a very good guy.

Excellent and clear information

Thank you for the information ☺️

Hi Justin, really appreciate your videos. Can you please breakdown the process for buying a property and at what stages an accountant is needed/recommended? Keep up the great work. Cheers. T

Very insightful

Some good clear advice. Especially about holding both sole trader status and limited company. Don’t hear that often in property advice!

Great video. Very useful.

Great video!!

Useful info thanks fellow Justin. Would have been useful to hear what an accountant will charge either one off or recurring and benefits of each one off annual vs recurring but v useful overall many thanks!

Hi thanks for your video - very helpful! May I ask you some specific questions? 1. If you start with just a couple of properties using ltd option, should the accountant be asked to setup the ltd company? 2. If we do our own housekeeping, save receipts etc, can we just ask accountant to do tax return each year? 3. Roughly how much should the account get paid for the above? Or do we have to pay monthly? If so how much expected? Thanks! J

Extremely good video, well done

Some great advice from your accountant. I’ve been in business 5 years. I got an accountant from day 1 to help me to set everything correctly. Cloud accounting software is a game changer it takes 10 minutes once a week to do accounts.

Great video cheers

Interesting and very required information

wow he is a great teacher. May be this accountant should have his own channel.

Really great content

Hi Justin, great video. It would be good next time to ask Peter to explain the tax benefits of using a limited company over personal name 😊

Great topic. I have portfolio and I’m looking to switch my accountant to a more specific property tax accountant. I found a new accountant but it’s not chartered. Do you recommend a non chartered is enough in what I’m doing (property landlord)? Thanks

Thanks for the great video, learning loads from your youtube channel. I was wondering where you look for properties e.g. Zoopla ?

Thanks again. Useful info. I'm at the stage of deciding whether to buy under a ltd company or not

Great video thank you for bothering to do it very informative .

How quick do you think it took you to jump from having 1 buy to let to having 2? And how quick was the whole process from when you took out your 1st mortgage? I've only just come across your videos and finding them very useful and really hope to follow in your footsteps.

09:17 Assuming that the £1 million is the 'profit' figure, then the rental income is not all charged at 45% tax. In point of fact, the tax rates and bands for 2020/21 are as follows: after utilising all allowances and reliefs (NB: Personal Allowance would be NIL as total income in excess of £125k) , the first £37,500 of taxable income is charged at 20%; the next £112,500 is taxed at 40%. Anything over £150,000 is taxed at 45%. Therefore, using the scenario being discussed and ignoring any other factors, the income tax on £1 million would be £435,000 NOT £450,000.

I wish more people share more about accountants about taxes about systems Or Gruop all about system Mostly people still don’t know where to found a good a Accountants to help safe taxes I hope more see video like this anywhere so can helpful people Thank you very much

Great video but left me wanting to know one more question. How do you find an accountant if you are not in a circle of property investors ?

Booked a consultation with Peter. Thanks for the video.

10:52 It is worth pointing out that a normally basic rate taxpayer with net rents receivable of £50,000 (i.e. after deduction of mortgage interest and expenses) may be liable for tax at basic as well as a higher rate tax. See example below. Assuming no other income, and with personal allowances of £12,500, if an individual receives £60,000 in rents (after the deduction of normal 'business' expenses of at least £1,000 - being the tax-free allowance on property income) and has mortgage interest of £10,000 then his/her net chargeable income is £50,000. After deducting the above personal allowances, the first £37,500 is then charged at 20%. HOWEVER, since the mortgage interest relief is a tax credit and not deducted from the mainstream rental income, it comes off the tax bill not the profit figure. So, the actual net rental income is £60,000. After deducting the personal allowance of £12,500 that leaves £47,500. The first £37,500 is then charged at 20% [£7,500] and the remaining £10,000 is charged at 40% [£4,000] which equates to £11,500. NOW the tax credit in respect of the mortgage interest is deducted i.e. £10,000 @ 20% = £2,000. So the tax payable is £11,500 less £2,000 = £9,500. Before section 24 (s24) ever came into being and using 2020/21 tax rates & allowances as an example, the tax charge would have been £60,000 (gross rents less expenses) less £10,000 (mortgage interest) less £12,500 (personal allowance) = £37,500 x 20% (basic rate tax) = £7,500. As you can see that makes a big difference to the tax bill: an extra £2,000 tax for no additional income received. And that is how s24 can affect basic rate taxpayers. I'm hoping all of the above makes sense.

We are buying a 12 bedroom house in Liverpool with a residential mortgage. Do we have to apply selective licensing and HMO licensing if we reside in that property and let out the other rooms?

Hi Justin - great video. I wondered if you had any thoughts about buying through a new "property" limited company that is set up specifically for a new property business versus buying through an already established ltd company. (I have a ltd company at present (non-property) and I'm not clear on what the advantage of setting up a new ltd company just for the property is (other than its likely cleaner paperwork wise) - any ideas / places to look / things to consider? Cheers

If I buy a property through a limited company and that too on cash. And the property will be on company name. Do i still need to pay dividend tax?. Or just the coporate tax?. Thnx

Can a copy of bank statements showing purchases made for property improvements be used for proof?

Thank you for such an informative video.. i was wondering if you could help as i cant seem to find the answer anywhere i have a residential property (currently on a consent to let) which is jointly owned by 2 people and we are thinking about selling back to ourselves through a ltd company. However, if we do so, and then we go on to purchase individual residential properties in our own names, will we have to pay stamp duty?

7:20 Ltd. company vs private ownership

Working on a catalyst calendar. If you know of any please lmk

If buy to let property monthly rental income same as monthly mortgage ( repayment/ interest only) do I have to pay tax. Please let me know thanks.

Thanks for the video - had a call today with my accountant asking the exact same questions! One thing he warned me about was that it could be harder to get a mortgage through the Ltd than it would be if I was to go as an individual. Have you had any experience with this?

It is fully phased now. Started in 2016.

Hi Justin, if you do another video like this with your accountant, I'd be interested in if this could be answered please. Let's say you have two property related LTD companies; 1 for buying buy to lets, and a 2nd for just doing flipping and building capital up. Is it then worth setting up a holdings company that owns both of those two companies, so you can move the money around between the two easier. Is this beneficial from a tax perspective? What are the benefits of a holdings company? Thanks

Hi buddy, Just a quick question. When your renting your property, who pays for the council tax and the water/electric bills? Keep the videos coming, I'm learning loads! Cheers

Very good video. Many people will be starting the process for their tax returns right now. It would be useful to know what fees an accountant would charge.

All good info, Ive been investing as a Ltd Co. in BTL for 15 years....recently sold some properties and expecting a tax bill but....I discovered Indexation relief !.....and what a relief it was....no tax to pay on profits ;-).....maybe do a vid on that ?

Just came across your video and found it to be very useful, thank you for sharing. I am currently exploring the option to open up a LTD company and buy a property through that. Would you recommend/suggest a business account which is cheapest to maintain on a monthly basis?

Hi Justin. Do all accountants now use this cloud software (quickbooks and receipt bank), or is it only select ones? We currently keep all our receipts for our business on a spreadsheet but as we are in our first year haven't worked with an accountant yet. Or are these pieces of software something we as business owners should be working with? Thanks

Hi mate, I think it would be worth looking into “commercial buy to let mortgages” and look at the difference in value on the same property in comparison to a standard residential buy to let mortgages. Whereas most HMO compliant properties are valued as a standard RICS red book valuation (brick and mortar), the commercial B-T-L mortgage used the yield % in the relevant area and comes to the appropriate figure. For example, a 3 bed could be valued at £150k in one area, but the same house valued as a commercial B-T-L mortgage, receiving £100pppw across 51 weeks at 8% yield comes to £191k. So a 41k increase in value. If used effectively it is possible to remortgage on the same day and have require 0 deposit. I am more than happy to discuss this with you further, I am a keen investor and this is the foundation of my investment (s) in the student market.

Nice

If I decide to purchase property under my own name and then decide I want to continue with a few more as I would then be in a higher tax bracket can I get the ones that are under my name transferred into the limited company or would it have to stay as it is and just continue with a limited company?

Wow, section 24 sucks. Entrepreneurs get taxed beyond belief.. Good video Justin 👍🏻

i work full time at the minute and I'm looking to get into property. My long term goal is to make enough rental income to give up the day job. If I do this through a limited company from the beginning and not draw an income until it makes more than my day job will I still need to pay tax?

Hi, what tips and advice would you give when looking at a property to invest? Freehold or Leasehold? Flat or House? City centre or suburbs? 1 bed, 2 bed or 3 bed? Studio flats, student accomodation? I am looking to make my first investment at 22 Also could you give advice on how to get the best mortgage deals.

Hi, I’ve got 4 properties all paid for one I live in and the other 3 rented out could I move the properties over to Ltd company especially with no stamp duty at the moment

Does section 24 effect Ltd companies? I thought Ltd companies can use 100% of the interests paid on there mortgage as a company expense, no?

What is the accounting software you are using? You talk about cloud accounting, but not the product name e.g. Sage. Great video by the way 👍

Can you do more of these kind of videos please?

Hi, I'm a potential non UK resident buyer and wanting to purchase a BTL property. I have never owned any residential property anywhere else. I do not qualify as a first time buyer, do I ? In addition, SDLT holiday does not benefit me as well?

11:55 "it becomes more of a problem the bigger your portfolio gets". Not quite true. It only becomes more of a problem if your mortgage interest repayments massively outstrip your profits. In other words... don't leverage new purchases with too much debt. Always own 50% of every rentL property outright and you'll be fine.

Just wondering whether a HMO property business through a company is considered trade or investment? What if you collect management fees from the tenants and outsource it to a management firm, would it be considered trade?

How do you structure the company with regard to leaving a legacy for your kids. I heard it is a trust. Because the company would own the property?

Any advice on HMOs?

Do you lose your first time buyers right if you buy a BTL through a limited company? I’ve asked so many people and nobody seems to have a definite answer

If you have them in your own name, as you grow, how do you transfer them to the limited company?

This might be a stupid question, but in the example around the 8:35 mark, when he says tax relief on the "mortgage interest", is this literally only on the interest portion of the mortgage payment and not the whole monthly mortgage payment? i.e. does that example on rent income (profit) and tax liability not even account for paying the portion of mortgage loan to actually eventually own the house(s)? If not, is this something property investors even do? BTL to eventually own the house? Or do they generally just build up a BTL portfolio by putting down deposit + fees, pay little on the mortgage and just take the remaining rent income after tax as profit in pocket?