Want to buy a house but keep my current one - Advice
Discussion
Hi - Some advice if I may people. I'll keep to the facts so as short as poss.
35 Years Old. Company Director.
Lived in same house for 10 years, got about £200k equity in it.
Got about £60k in cash spare at the bank.
Starting to think a bigger house is required and a change of scenery would be nice too.
Don't have a pension so thinking keeping my current house and letting someone rent it to pay off the remaining mortgage (40% LTV) would be nice. Then once mortgage is done I've got some income without having to work for it day to day, would be a nice monthly income once I retire.
I'm trying to save but it's quite hard isn't it! Will take me a while to add £100k to the £60k that I have already so thinking that I will need to remortgage my current to pull out some of the equity before getting a mortgage for the new property with a deposit of £160k which should allow me to buy a £550k ish house?
Am I missing something, am I looking at this correctly or anyone got any feedback on how it could be done better?
TIA
35 Years Old. Company Director.
Lived in same house for 10 years, got about £200k equity in it.
Got about £60k in cash spare at the bank.
Starting to think a bigger house is required and a change of scenery would be nice too.
Don't have a pension so thinking keeping my current house and letting someone rent it to pay off the remaining mortgage (40% LTV) would be nice. Then once mortgage is done I've got some income without having to work for it day to day, would be a nice monthly income once I retire.
I'm trying to save but it's quite hard isn't it! Will take me a while to add £100k to the £60k that I have already so thinking that I will need to remortgage my current to pull out some of the equity before getting a mortgage for the new property with a deposit of £160k which should allow me to buy a £550k ish house?
Am I missing something, am I looking at this correctly or anyone got any feedback on how it could be done better?
TIA
Saleen836 said:
A quick online calculator says your stamp duty bill on a £550k house will be...£34k
Great! You work hard try and build for your future so you can pay your own way rather than relay on handouts and benefits and you are taxed to f**k. £34k will take me a while to save and I don't get given anything from anyone, no rich relatives or inheritance pending for me. So I need to earn double that to pay tax on it to pay more tax LOL. Love this country.....So that leaves with renting the new house and renting out the current one I guess...................
I think I will have about £750 profit each month from current to put into the new house but will have to pay tax on that too.
Death and taxes hey
jonamv8 said:
Great! You work hard try and build for your future so you can pay your own way rather than relay on handouts and benefits and you are taxed to f**k. £34k will take me a while to save and I don't get given anything from anyone, no rich relatives or inheritance pending for me. So I need to earn double that to pay tax on it to pay more tax LOL. Love this country.....
So that leaves with renting the new house and renting out the current one I guess...................
I think I will have about £750 profit each month from current to put into the new house but will have to pay tax on that too.
Death and taxes hey
It'll be £17,500 if you decide to sell the original property within three (I believe) years, and you'll get a rebate. Landlords feel like public enemy number one as this country is obsessed with the notion that everyone should own their own house, heaven forbid we enter a more European model whereby renting is not considered such a cardinal sin. So that leaves with renting the new house and renting out the current one I guess...................
I think I will have about £750 profit each month from current to put into the new house but will have to pay tax on that too.
Death and taxes hey
Without knowing your salary, but assuming based on Company Director you're a higher rate tax payer, I would consider dropping the rental property idea, and contributing more of your salary to your pension and enjoy not getting 40% taken away. Also have a look into LISAs to accompany that as well.
Any thoughts on when you might want to retire? You mention no pension.
One of the few remaining benefits of being a company director is having the ability to move money, pre tax, from your LTD to a SIPP.
If you want to retire at 45, for example, maybe not worth doing. But if you are intending to retire 55 or later its very worth doing!
You wont get 20% tax credit but you will not pay corp tax on the contributions.
As for the mortgage, make sure you have your ducks in a row and 3 years tax returns to support your lending request. Most lenders want 2 years at least. They may also look at your debt, personal bank accounts and business bank accounts etc.
Sarnie is your man for that.
One of the few remaining benefits of being a company director is having the ability to move money, pre tax, from your LTD to a SIPP.
If you want to retire at 45, for example, maybe not worth doing. But if you are intending to retire 55 or later its very worth doing!
You wont get 20% tax credit but you will not pay corp tax on the contributions.
As for the mortgage, make sure you have your ducks in a row and 3 years tax returns to support your lending request. Most lenders want 2 years at least. They may also look at your debt, personal bank accounts and business bank accounts etc.
Sarnie is your man for that.
Over over under steer said:
It'll be £17,500 if you decide to sell the original property within three (I believe) years, and you'll get a rebate. Landlords feel like public enemy number one as this country is obsessed with the notion that everyone should own their own house, heaven forbid we enter a more European model whereby renting is not considered such a cardinal sin.
Without knowing your salary, but assuming based on Company Director you're a higher rate tax payer, I would consider dropping the rental property idea, and contributing more of your salary to your pension and enjoy not getting 40% taken away. Also have a look into LISAs to accompany that as well.
Thanks for the feedback.Without knowing your salary, but assuming based on Company Director you're a higher rate tax payer, I would consider dropping the rental property idea, and contributing more of your salary to your pension and enjoy not getting 40% taken away. Also have a look into LISAs to accompany that as well.
My original plan would be to hold onto my current house for much longer than 3 years so no rebate for me if I did end up forking out the £34k
Yep higher rate tax payer so taxed HARD..... If I drop the rental idea I can pull out the £200k which would be nice and mortgage another £300k ish and move to own.
I'm clueless on pensions tbh, I've always made money out of having money round me so the thought of putting it away for an extended period of time has not appealed. How much do I need in the pot to pull out 1500 a month when retired? Is there a good calculator online for making projections in this regard?
Thanks - Jon
red_slr said:
Any thoughts on when you might want to retire? You mention no pension.
One of the few remaining benefits of being a company director is having the ability to move money, pre tax, from your LTD to a SIPP.
If you want to retire at 45, for example, maybe not worth doing. But if you are intending to retire 55 or later its very worth doing!
You wont get 20% tax credit but you will not pay corp tax on the contributions.
As for the mortgage, make sure you have your ducks in a row and 3 years tax returns to support your lending request. Most lenders want 2 years at least. They may also look at your debt, personal bank accounts and business bank accounts etc.
Sarnie is your man for that.
No thoughts on retirement age but thinking 60s unless one of my side ventures goes big and we sell up for a few mill.One of the few remaining benefits of being a company director is having the ability to move money, pre tax, from your LTD to a SIPP.
If you want to retire at 45, for example, maybe not worth doing. But if you are intending to retire 55 or later its very worth doing!
You wont get 20% tax credit but you will not pay corp tax on the contributions.
As for the mortgage, make sure you have your ducks in a row and 3 years tax returns to support your lending request. Most lenders want 2 years at least. They may also look at your debt, personal bank accounts and business bank accounts etc.
Sarnie is your man for that.
Yep had this current LTD for years no so the returns for 3 years + would be no issue :-)
Thanks for all the advice
jonamv8 said:
How much do I need in the pot to pull out 1500 a month when retired? Is there a good calculator online for making projections in this regard?
It depends, but around £500k.To get a ball park take your annual income requirement and multiply by 25.
If you are more risk averse multiply by 30.
jonamv8 said:
red_slr said:
Any thoughts on when you might want to retire? You mention no pension.
One of the few remaining benefits of being a company director is having the ability to move money, pre tax, from your LTD to a SIPP.
If you want to retire at 45, for example, maybe not worth doing. But if you are intending to retire 55 or later its very worth doing!
You wont get 20% tax credit but you will not pay corp tax on the contributions.
As for the mortgage, make sure you have your ducks in a row and 3 years tax returns to support your lending request. Most lenders want 2 years at least. They may also look at your debt, personal bank accounts and business bank accounts etc.
Sarnie is your man for that.
No thoughts on retirement age but thinking 60s unless one of my side ventures goes big and we sell up for a few mill.One of the few remaining benefits of being a company director is having the ability to move money, pre tax, from your LTD to a SIPP.
If you want to retire at 45, for example, maybe not worth doing. But if you are intending to retire 55 or later its very worth doing!
You wont get 20% tax credit but you will not pay corp tax on the contributions.
As for the mortgage, make sure you have your ducks in a row and 3 years tax returns to support your lending request. Most lenders want 2 years at least. They may also look at your debt, personal bank accounts and business bank accounts etc.
Sarnie is your man for that.
Yep had this current LTD for years no so the returns for 3 years + would be no issue :-)
Thanks for all the advice
I think you should be seriously looking at a pension via your LTD if you are a higher rate tax payer and intend to retire at 60.
red_slr said:
jonamv8 said:
red_slr said:
Any thoughts on when you might want to retire? You mention no pension.
One of the few remaining benefits of being a company director is having the ability to move money, pre tax, from your LTD to a SIPP.
If you want to retire at 45, for example, maybe not worth doing. But if you are intending to retire 55 or later its very worth doing!
You wont get 20% tax credit but you will not pay corp tax on the contributions.
As for the mortgage, make sure you have your ducks in a row and 3 years tax returns to support your lending request. Most lenders want 2 years at least. They may also look at your debt, personal bank accounts and business bank accounts etc.
Sarnie is your man for that.
No thoughts on retirement age but thinking 60s unless one of my side ventures goes big and we sell up for a few mill.One of the few remaining benefits of being a company director is having the ability to move money, pre tax, from your LTD to a SIPP.
If you want to retire at 45, for example, maybe not worth doing. But if you are intending to retire 55 or later its very worth doing!
You wont get 20% tax credit but you will not pay corp tax on the contributions.
As for the mortgage, make sure you have your ducks in a row and 3 years tax returns to support your lending request. Most lenders want 2 years at least. They may also look at your debt, personal bank accounts and business bank accounts etc.
Sarnie is your man for that.
Yep had this current LTD for years no so the returns for 3 years + would be no issue :-)
Thanks for all the advice
I think you should be seriously looking at a pension via your LTD if you are a higher rate tax payer and intend to retire at 60.
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