One of the country’s leading buying agencies says buy to let is changing in prime central London, as corporate structures replace individual purchasers.
April 2020 sees the end of the old system for individual investors claiming tax relief on buy to let mortgage interest rate payments.
The Black Brick agency says that while this has dampened the appeal of the buy to let market to the investor looking to purchase one or two properties, it remains attractive to those buyers who are able to create a corporate structure through which to make multiple BTL investments.
“There are numerous advantages to this kind of approach and we are seeing considerable interest from clients in continuing to invest in residential PCL property as corporate buyers” says Camilla Dell, the founder and managing partner at Black Brick.
The agency says that financing costs are fully tax deductible for corporate entities, significantly reducing ongoing costs.
In addition, purchases of six units or more in a single transaction qualifies as a commercial property transaction, which carries zero stamp duty on the first £150,000 of value, two per cent on the next £100,000, and five per cent on the value above £250,000 - these are far below residential stamp duty levels for individual investors.