Home  Landlords  Landlords look to limited companies in response to tax changes

Category: Landlords

Landlords look to limited companies in response to tax changes

Reading Time: 2 Mins Read

Growing numbers of landlords are looking to take out commercial loans or set up limited companies in a bid to outmanoeuvre tax changes.

Landlords look to limited companies in response to tax changes

According to the National Landlord’s Association (NLA), the proportion of landlords planning to use commercial loans has increased from 10% in July 2015 (when the tax changes were first announced) to 19% at the end of 2016.

As well as an increase in interest for commercial loans, the NLA reports a 500% in the proportion of landlords who have formed limited companies in the last year.

By turning a property into a limited company, landlords will be able to sidestep these tax changes.

The changes to taxation will see landlords lose their ability to claim mortgage interest tax relief, and this will be phased in from April this year until 2020.

Critics of the tax change have argued it will leave landlords with no option but to increase rents, increasing the financial burden for tenants.

However, Chief Executive Officer at the NLA, Richard Lambert, warned landlords that the Chancellor may clamp down on limited companies in his Spring Budget: “With this government’s recent track record in mind, we’d advise any landlords who have yet to incorporate to wait to see whether a consultation is launched in the Budget before making a decision.”

For more on this story, click below:

Landlord Today

Neil Jennings

Neil background is in marketing and business development and has over 20 years experience in the field. He runs Asset Grove and is involved in the marketing strategy for most of our campaigns.

Related Post

When should I change the locks on my buy-to-let property?
Updates: 4 Mins Read
When should I change the locks on my buy-to-let property?

Should landlords change the locks at the end of a tenancy? Is it a good idea for landlords to change the locks between tenancies? Read this article to get some advice on when to change the locks on your buy-to-let property.

What is rent guarantee insurance?
Updates: 4 Mins Read
What is rent guarantee insurance?

Rent guarantee insurance provides cover for landlords, should their tenants fail to pay their rent. Unlike building insurance, it’s not a legal requirement to take

Looking ahead – how will landlords invest in 2020?
Updates: 2 Mins Read
Looking ahead – how will landlords invest in 2020?

Investing in houses of multiple occupation (HMOs) will be the preferred strategy of landlords who plan to add to their portfolios in 2020, according to