Is BTL still possible?
Discussion
NickCQ said:
Groat said:
Another plus point for anyone thinking about switching ownership of a portfolio to a Ltd Co is to remember that what's called Stamp Duty Surcharge (3%) in England and Additional Dwelling Supplement (4%) in Scotland doesn't apply if you're involving SIX or more properties in one transaction.
Doesn't it get treated as a commercial transaction though, so you pay 5% over £250k? Winds up roughly in the same place in England I would have thought. Maybe a bit cheaper in Sc without Nicola's vig.In fact you've inspired me to find out.
Hmmm
https://revenue.scot/taxes/land-buildings-transact...
Section 2 para 3 seems to indicate no charge, and I'm not digging deeper into the SSI because that's enough 'work' for me for today
If it was me I'd pay nothing and just live with the negligible possibility of being pulled up on it at some later date.
Edited by Groat on Wednesday 1st September 12:56
Northernboy said:
Groat said:
A couple of hundred thousand of the wealthiest and most able Scots - all on the make and take - suddenly arrive on your patch!!!
HAHAHAHAHAHAHAHAHAHAHA!!!!
A great many of the best educated Scots are already living in England, and the arrival of more will be welcomed.HAHAHAHAHAHAHAHAHAHAHA!!!!
There’ll need to be a bit of work to be done to help them cope with competing against those from the UK’s better universities, but the Scots’ fine history in science and engineering suggests they’ll tend to be real assets.
98elise said:
Northernboy said:
Groat said:
A couple of hundred thousand of the wealthiest and most able Scots - all on the make and take - suddenly arrive on your patch!!!
HAHAHAHAHAHAHAHAHAHAHA!!!!
A great many of the best educated Scots are already living in England, and the arrival of more will be welcomed.HAHAHAHAHAHAHAHAHAHAHA!!!!
There’ll need to be a bit of work to be done to help them cope with competing against those from the UK’s better universities, but the Scots’ fine history in science and engineering suggests they’ll tend to be real assets.
Northernboy said:
Groat said:
Spot the problem with THAT silly idea.
No problem, people rent from income in general, not from wealth."Hi! I'm a newly arrived homeless refugee fleeing a rogue state who've confiscated all my goods and wealth. Sorry, nae deposit. Is it ok if I self-certify my income? It IS!! Great! Don't you worry. I'LL look after your really nice property! Honest!"
5 minutes later at a lorry parked round the corner:
"Right. The Rupert's gie'd us the keys. One family to a room. There's tons in it to sell! Get the meter screwed and the sleeping bags in and that's us well sorted! By the way, the way their dafty legal system works it'll be YEARS before they can shift us oot. By then the Rupert'll be begging us to buy it off him for the knockdown price we'll easily make from subletting tent spaces in the garden to the rest of the clan".
NickCQ said:
LooneyTunes said:
If you add the 3% surcharge for Ltd and assume a 5% rental return, as crude approximation, <£250k tends to be about a year’s rental for purchase costs (legals and sdlt). It’s when you get past £500k that you’re into 12m+ but would need to be into some very serious figures for it to take many years to cover sdlt.
The issue is that the rental yield tends to go down as the property gets larger. Agree that in the £200k band it's not so much of a problem, but going back to the prior scenario of a c. £1 mm vacant ex family home that might yield <3% net after tax, you can see how it doesn't make sense.Groat said:
98elise said:
Agreed, why wouldn't we want an influx of wealth and able people?
True enough. London's certainly benefitted from being bought and run by incoming foreigners, so why not the rest of the place?Groat said:
NickCQ said:
Groat said:
Another plus point for anyone thinking about switching ownership of a portfolio to a Ltd Co is to remember that what's called Stamp Duty Surcharge (3%) in England and Additional Dwelling Supplement (4%) in Scotland doesn't apply if you're involving SIX or more properties in one transaction.
Doesn't it get treated as a commercial transaction though, so you pay 5% over £250k? Winds up roughly in the same place in England I would have thought. Maybe a bit cheaper in Sc without Nicola's vig.In fact you've inspired me to find out.
Hmmm
https://revenue.scot/taxes/land-buildings-transact...
Section 2 para 3 seems to indicate no charge, and I'm not digging deeper into the SSI because that's enough 'work' for me for today
If it was me I'd pay nothing and just live with the negligible possibility of being pulled up on it at some later date.
Edited by Groat on Wednesday 1st September 12:56
Groat said:
HAHAHHAHAHAHA!!! This is going to be even easier than I thought!
"Hi! I'm a newly arrived homeless refugee fleeing a rogue state who've confiscated all my goods and wealth. Sorry, nae deposit. Is it ok if I self-certify my income? It IS!! Great! Don't you worry. I'LL look after your really nice property! Honest!"
5 minutes later at a lorry parked round the corner:
"Right. The Rupert's gie'd us the keys. One family to a room. There's tons in it to sell! Get the meter screwed and the sleeping bags in and that's us well sorted! By the way, the way their dafty legal system works it'll be YEARS before they can shift us oot. By then the Rupert'll be begging us to buy it off him for the knockdown price we'll easily make from subletting tent spaces in the garden to the rest of the clan".
You have an appalling view of your countrymen. The Scots I know in England have good jobs, and are honest."Hi! I'm a newly arrived homeless refugee fleeing a rogue state who've confiscated all my goods and wealth. Sorry, nae deposit. Is it ok if I self-certify my income? It IS!! Great! Don't you worry. I'LL look after your really nice property! Honest!"
5 minutes later at a lorry parked round the corner:
"Right. The Rupert's gie'd us the keys. One family to a room. There's tons in it to sell! Get the meter screwed and the sleeping bags in and that's us well sorted! By the way, the way their dafty legal system works it'll be YEARS before they can shift us oot. By then the Rupert'll be begging us to buy it off him for the knockdown price we'll easily make from subletting tent spaces in the garden to the rest of the clan".
LooneyTunes said:
True, but depends on area. Locally to me there are places >£1m renting at ~5%, but they’re aimed at very specific markets and if you’re renting £1m+ properties you’ve probably explored tax advice/structuring. The other aspects are capital appreciation and potential to add value, both areas where more expensive properties tend to do better in absolute terms.
Looney. Think about it. Any way you want to look at it the best bottom line is made at the lower (not bottom) end. Always has been and always will be. That's why build-to-rent is about throwing up cheap apartments not luxury gated estates of 6 bed detached. For Example.
Groat said:
LooneyTunes said:
True, but depends on area. Locally to me there are places >£1m renting at ~5%, but they’re aimed at very specific markets and if you’re renting £1m+ properties you’ve probably explored tax advice/structuring. The other aspects are capital appreciation and potential to add value, both areas where more expensive properties tend to do better in absolute terms.
Looney. Think about it. Any way you want to look at it the best bottom line is made at the lower (not bottom) end. Always has been and always will be. That's why build-to-rent is about throwing up cheap apartments not luxury gated estates of 6 bed detached. For Example.
LooneyTunes said:
I agree completely! All I’m saying is that it can still work higher up, but it’s very niche. Personally I wouldn’t want to spend £1m+ on a rental but there are some who have properties at that level who make it work (and have the benefit, and risks, associated with managing a smaller number of units).
Of course it can work, just not as efficiently. In my experience, people dealing in larger numbers tend to deal in commercial property rather than residential. And in my management experience 'posh' residentials were an absolute no-no given the number and variety of problems and rows they throw up, constantly, from all sides.
As you say, 'very niche'. And often populated by the most appalling people (which isn't surprising given the lengths they go to give each other a sore head all day).
Edited by Groat on Wednesday 1st September 14:09
RichardD said:
Life in Moneyland 
You can kind of understand why. Tens of millions of newly wealthy individuals across a range of tinpot states where their government could seize their assets at any moment. Paying up to 25% to shelter your hard earned savings under English Law from a 100% haircut is clearly desirable. There are even Southern Europeans who have decided to buy a property in London and rent it out and rent in their home country, or to convert money in the bank that can be bailed-in to property in London that can't. Sheltering one's savings from the mad clutches of Ze Germans is quite a popular pastime.
. It's not even the super wealthy, just the middle income earners in developing nations who have no other viable means to protect themselves.
Groat said:
In my experience, people dealing in larger numbers tend to deal in commercial property rather than residential. And in my management experience 'posh' residentials were an absolute no-no given the number and variety of problems and rows they throw up, constantly, from all sides.
Yes, I know a few people with very nice commercial property interests. Quite a diverse space, but none of them seem to do badly (I do wonder how it plays for LLs who really stretch to buy tenanted properties via SIPPs, clearly never having had any practical exposure to commercial property/leases before). I expect to end up with some commercial in the mix, but limited scope compared to friends in larger conurbations.As for management of top end resi... knowing who rents them round here, no way would I want to be exposed to that!
https://www.bbc.co.uk/news/business-65090846
I was reading this, landlords are bailing out of the market and renters are really struggling and so the govt decides to do more to help renters with their rights as a solution
Of course, working out why there aren't enough rental homes any more would be too easy...
I was reading this, landlords are bailing out of the market and renters are really struggling and so the govt decides to do more to help renters with their rights as a solution
Of course, working out why there aren't enough rental homes any more would be too easy...
Frimley111R said:
https://www.bbc.co.uk/news/business-65090846
I was reading this, landlords are bailing out of the market and renters are really struggling and so the govt decides to do more to help renters with their rights as a solution
Of course, working out why there aren't enough rental homes any more would be too easy...
This is going to snowball in a few years. More and more renters less and less homes to rent. I was reading this, landlords are bailing out of the market and renters are really struggling and so the govt decides to do more to help renters with their rights as a solution
Of course, working out why there aren't enough rental homes any more would be too easy...
Gassing Station | Finance | Top of Page | What's New | My Stuff