LETTING & ESTATE AGENT

Investors turn to loophole to avoid pending tax changes

Investors turn to loophole to avoid pending tax changes

Rising numbers of Britain's landlords are selling properties to themselves using a loophole that enables them to avoid paying more tax.

According to figures published in the Daily Mail, over 60% of landlords are now investing through limited companies as a means of avoiding new tax rules coming into force next year.

The reason for this is the new tax rises on buy-to-let landlords can be avoided if they invest through a company, rather than as an individual. This method has proved so popular that the number of applications for buy-to-let mortgages made by companies has increased three fold in the last 12 months.

These pending tax reforms were bought in to try and cool the buy-to-let market. Even though we have had a change of Chancellor since their announcement, there is a fear that new laws may be introduced to try and close this loophole.

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