Property Development
Discussion
Hi
I was looking for some friendly advice and had some basic questions that I was hoping you could help me with!
I know there are a couple of developers on here and wanted to check that what I was thinking was correct.
I have set up a ltd company and plan to buy properties with the purpose of doing them up and reselling them.
The are I am interested in is SW London purely because it is local to me.
The venture will be funded by a directors loan (how do I go about this? Does the money actually need to go into the biz account or can I simply purchase the property with my money but buy it in the companies name? Where do I need to show the directors loan is there?)
I also presume that I will need to register for VAT as again I presume the property purchase price counts towards the turnover therefore putting me well over the threshold before I have even begun.
Does anyone have any recommendations for accountants around the Wimbledon area?
Can anyone tell me what I should expect to pay? What reasonable fees are?
Thanks
Dominic
I was looking for some friendly advice and had some basic questions that I was hoping you could help me with!
I know there are a couple of developers on here and wanted to check that what I was thinking was correct.
I have set up a ltd company and plan to buy properties with the purpose of doing them up and reselling them.
The are I am interested in is SW London purely because it is local to me.
The venture will be funded by a directors loan (how do I go about this? Does the money actually need to go into the biz account or can I simply purchase the property with my money but buy it in the companies name? Where do I need to show the directors loan is there?)
I also presume that I will need to register for VAT as again I presume the property purchase price counts towards the turnover therefore putting me well over the threshold before I have even begun.
Does anyone have any recommendations for accountants around the Wimbledon area?
Can anyone tell me what I should expect to pay? What reasonable fees are?
Thanks
Dominic
As you mentioned in your original post, there are a number of ways -
put your own actual cash into the company bank account
buy an asset or fund other company costs from your personal resources but have the assets and costs in the ownership of the company
The problem with buying land and property is that, unless you are buying for cash, you will probably have to clear such arrangements with the lenders.
Regarding VAT, is the development work going to be involving residential or commercial properties. The VAT rules on land and buildings are probably some of the most complex out there.
put your own actual cash into the company bank account
buy an asset or fund other company costs from your personal resources but have the assets and costs in the ownership of the company
The problem with buying land and property is that, unless you are buying for cash, you will probably have to clear such arrangements with the lenders.
Regarding VAT, is the development work going to be involving residential or commercial properties. The VAT rules on land and buildings are probably some of the most complex out there.
Eric Mc said:
Regarding VAT, is the development work going to be involving residential or commercial properties. The VAT rules on land and buildings are probably some of the most complex out there.
You're not wrong there!!I am in the early stages of a development in North Cornwall and am finding this almost incomprehensible.I would suggest talking to a specialist,it may well save you a lot of money.
OP - have a read through this: https://www.gov.uk/government/publications/vat-not...
Hi
Yes there is no lending involved at present. Maybe after a couple of years and more experience I will leverage up.
I am purely doing residential at present.
The property I am interested is a simple extension and refurb job and I won't be splitting the property at all so it will remain a single residence.
I was hoping that this simplified the VAT rules significantly.
Thanks for the link and I will take a look.
As I said I am not averse to paying for advice. I am just wondering if there was anyone with someone local they could recommend and give me a guideline as to what reasonable fees are.
Thanks again!
Dom
Yes there is no lending involved at present. Maybe after a couple of years and more experience I will leverage up.
I am purely doing residential at present.
The property I am interested is a simple extension and refurb job and I won't be splitting the property at all so it will remain a single residence.
I was hoping that this simplified the VAT rules significantly.
Thanks for the link and I will take a look.
As I said I am not averse to paying for advice. I am just wondering if there was anyone with someone local they could recommend and give me a guideline as to what reasonable fees are.
Thanks again!
Dom
bigbaddom said:
But do I not need to be vat registered in any case as my turnover will be over the threshold.
Even if I can't reclaim it or charge it?
Thanks
No - if the turnover is chiefly made up of VAT Exempt sales, Zero Rated sales or "Outside the Scope" sales, then, even if the sales over any 12 month period exceed the compulsory turnover threshold (currently £83,000), then you do not have to register.Even if I can't reclaim it or charge it?
Thanks
No - if you are just converting/refurbishing a residential property with previous residential use in the past ten years, then that is an exempt business for VAT purposes. You cannot register for VAT - and you do not charge VAT when you sell the completed development property.
It is different if it is a new build or a conversion from commercial to residential for instance - then you can register for VAT.
It is different if it is a new build or a conversion from commercial to residential for instance - then you can register for VAT.
z4RRSchris said:
your starting very small in a market that is falling, and you have no inside connections.
good luck
I'm not sure if the market the OP refers to is actually falling. He's not doing new builds, he's buying up run-down houses cheaply, refurbishing them, and then hoping to sell for a profit. From what I can see there are lots of houses where the current occupants CBA to do it up and would rather sell for £10-£50k less. It's ideal for somebody with decent DIY skills or contacts to buy/refurb/flip quickly.good luck
any house worth doing will have been purchased before it comes on the open market. all agents have a list of people they tip off and do a quick deal for a bit of a bank hander.
upto now it has worked because the market is rising which generate your profit (not the st howdens kitchen you put in).
stamp, financing, time, tax.
upto now it has worked because the market is rising which generate your profit (not the st howdens kitchen you put in).
stamp, financing, time, tax.
z4RRSchris said:
any house worth doing will have been purchased before it comes on the open market. .
Many/most estate agents who take their clients' interests seriously will put them on the open market to get a bidding war going. Many sellers will insist on this anyway. Sourcers don't usually get top tier projects unless the open market's dead or speed of sale is the seller's priority.z4RRSchris said:
any house worth doing will have been purchased before it comes on the open market. all agents have a list of people they tip off and do a quick deal for a bit of a bank hander.
I'm not talking about repos. I'm talking about normal houses which are a bit rundown and the owner is looking to move on (or maybe it's a BTL and he needs the cash for something else). Ideally it needs £10k-£15k spending on it to get it up to market value. There are a lot of builders / DIYers who can fix it up more cheaply and sell accordingly.Why would the original vendor let it to for less than MV?
Thanks for all of the words of advice.
I don't really want to get into an argument as to whether or not it is worth doing tbh.
I think it is, and it's something I enjoy doing. If I massively lose out to a falling market I can afford to both take the hit or wait it out.
In any case the money would always be reinvested, so even if the market did fall as long as there was some return from the work you did. You would be able to buy a nicer (bigger, better area) run down property. If you follow my drift.
I know of a couple of people who do this quite regularly with the main homes. I don't see why it shouldn't work when it isn't.
I don't really want to get into an argument as to whether or not it is worth doing tbh.
I think it is, and it's something I enjoy doing. If I massively lose out to a falling market I can afford to both take the hit or wait it out.
In any case the money would always be reinvested, so even if the market did fall as long as there was some return from the work you did. You would be able to buy a nicer (bigger, better area) run down property. If you follow my drift.
I know of a couple of people who do this quite regularly with the main homes. I don't see why it shouldn't work when it isn't.
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