Best route to take buying more houses
Discussion
Hi all.
For fear of starting another war on PH regarding who should invest where and how, I have a reasonably simple question.
We own two houses, my wife and I, and we are due a move back to the UK in the next couple of months.
Now I am intent on buying a house as I don't like renting, for various reasons (please don't ask, it's almost entirely irrelevant).
Our other two houses are let out, and our next house will be around the High Wycombe area.
Can someone tell me the best route to take (not looking to avoid and taxes or the like), just the most simple/sensible/commonly used one when an individual wishes to own a few houses?
I don't mean financing them, though suggestions are welcome to that end.
But is there a point when it's better to set up a business, or best to stay as 'individuals'?
My wifes career means we move around quite a bit, hence why we have two already.
Thanks in advance for any useful answers
For fear of starting another war on PH regarding who should invest where and how, I have a reasonably simple question.
We own two houses, my wife and I, and we are due a move back to the UK in the next couple of months.
Now I am intent on buying a house as I don't like renting, for various reasons (please don't ask, it's almost entirely irrelevant).
Our other two houses are let out, and our next house will be around the High Wycombe area.
Can someone tell me the best route to take (not looking to avoid and taxes or the like), just the most simple/sensible/commonly used one when an individual wishes to own a few houses?
I don't mean financing them, though suggestions are welcome to that end.
But is there a point when it's better to set up a business, or best to stay as 'individuals'?
My wifes career means we move around quite a bit, hence why we have two already.
Thanks in advance for any useful answers
Edited by TheLordJohn on Wednesday 14th December 21:12
The government is squeezing as much juice as it can out of property currently, so expect to pay lots of tax, not really much way around it when talking small scale private holdings as you are - well other than liquidating existing to move into alt assets or buying new place without mortgage. The removal of mortgage interest as a deductible has made an absolutely massive difference to net returns, especially when coupled with fairly conservative expectations for capital appreciation. Of course if you are cash it's a bit different, though you can still sell and move into alt assets and thus purchase your new place with less tax. Personally I can't really see the attractiveness of much English resi as an investment myself, but your choice.
Yeah not bothered in alternative investments. Just want to buy a house wherever we have to live.
We let the other two out since leaving the north of England. Not looking to 'maximise gains' or any other buzzwords, just wanting to know the best way to proceed over the next couple of years, especially once we get to 5+.
We let the other two out since leaving the north of England. Not looking to 'maximise gains' or any other buzzwords, just wanting to know the best way to proceed over the next couple of years, especially once we get to 5+.
TheLordJohn said:
NickCQ said:
Why would you buy two more in addition to the two you already have and the new one that you are going to live in?
As per the penultimate line of my first post, my wifes' job means we move around quite a lot. NickCQ said:
Ah OK, understand, thought you were considering additional investment properties. Once you have a 'main home' in the UK, you can switch it without paying the 3% stamp duty surcharge, so you either need to stomach it once the first time you move back or live in one of your BTLs for a period of time.
How do you mean? If the house I buy is going to be a main residence but I already own 1+ over £40k house I am not subject to the surcharge? We buy a house wherever we are, do it up a bit whilst living in it then when we have to move we find tenants. We won't be buying a house to let out immediately.
Thanks, Stuart.
TheLordJohn said:
How do you mean? If the house I buy is going to be a main residence but I already own 1+ over £40k house I am not subject to the surcharge?
Not exactly. If you are selling your main residence and purchasing another property to use as your main residence, it is exempt. So if you own the same number of properties before and after the transaction you would be exempt.The only other workaround I see is to buy a static caravan (stamp duty exempt), live in it long enough for it to become your main residence and then swap it for something that you'd actually live in.
NickCQ said:
Not exactly. If you are selling your main residence and purchasing another property to use as your main residence, it is exempt. So if you own the same number of properties before and after the transaction you would be exempt.
The only other workaround I see is to buy a static caravan (stamp duty exempt), live in it long enough for it to become your main residence and then swap it for something that you'd actually live in.
That last point is a great shout, lol. I dare say they've got something in place to shaft hard-working people so they've closed that particular loop-hole.The only other workaround I see is to buy a static caravan (stamp duty exempt), live in it long enough for it to become your main residence and then swap it for something that you'd actually live in.
As stated, it's not really about avoiding tax, as much as it is about 'What's the best route to take going forward?'.
Thanks, Stuart.
TheLordJohn said:
NickCQ said:
Not exactly. If you are selling your main residence and purchasing another property to use as your main residence, it is exempt. So if you own the same number of properties before and after the transaction you would be exempt.
The only other workaround I see is to buy a static caravan (stamp duty exempt), live in it long enough for it to become your main residence and then swap it for something that you'd actually live in.
That last point is a great shout, lol. I dare say they've got something in place to shaft hard-working people so they've closed that particular loop-hole.The only other workaround I see is to buy a static caravan (stamp duty exempt), live in it long enough for it to become your main residence and then swap it for something that you'd actually live in.
As stated, it's not really about avoiding tax, as much as it is about 'What's the best route to take going forward?'.
Thanks, Stuart.
Yup. It's all a little bit in limbo at present in terms of advisors catagorically knowing the correct answer for your circumstances. We even have talk emerging of the stamp duty rules changing again as the Govt has dropped £10bln in receipts since the changes.
There are plenty of people whose work is roughly a three year rotation around the UK and many would buy at each location and then rent out when they moved on as you are doing. It makes for a slightly less efficient portfolio model due to the geographical separation of the assets meaning you almost certainly need to use agents but, as you've mentioned, the flip side is that you can buy distressed and do up on your own time and labour.
In the old days the properties would just be moved into a trust but I think all that has changed somewhat in the last decade.
As it may transpire that the most efficient way to run the scheme is to flip the old residence into a trust or corporate wrapper of some kind as you buy the new home then due to the stamp issue that you'd pay on purchase into your name and then pay on transfer into the wrapper then my initial thought is that maybe you never buy the property in your name in the first instance? Maybe it is more efficient to buy via the wrapper each time and just be your own customer. Pay market rent and offset all the costs of developing the property?
There are plenty of people whose work is roughly a three year rotation around the UK and many would buy at each location and then rent out when they moved on as you are doing. It makes for a slightly less efficient portfolio model due to the geographical separation of the assets meaning you almost certainly need to use agents but, as you've mentioned, the flip side is that you can buy distressed and do up on your own time and labour.
In the old days the properties would just be moved into a trust but I think all that has changed somewhat in the last decade.
As it may transpire that the most efficient way to run the scheme is to flip the old residence into a trust or corporate wrapper of some kind as you buy the new home then due to the stamp issue that you'd pay on purchase into your name and then pay on transfer into the wrapper then my initial thought is that maybe you never buy the property in your name in the first instance? Maybe it is more efficient to buy via the wrapper each time and just be your own customer. Pay market rent and offset all the costs of developing the property?
NickCQ said:
Yeah, you need a BTL expert to tell you at what point it makes sense to incorporate a company to own properties rather than own yourself. At some point the tax advantages will outweigh the fixed costs and hassle of running a company (audit, registration, filing and so on).
Most companies have not been audited since 1991.Thanks for replies, gents.
I think it's time to speak to an 'expert' when we return.
The only problem is finding someone who actually walks the walk and knows what they're doing.
If they 'do' what you are looking to do, you can have a lot more faith in the advice they're giving.
There were plenty of financial experts who lost a lot of people a lot of money a decade ago!
I think it's time to speak to an 'expert' when we return.
The only problem is finding someone who actually walks the walk and knows what they're doing.
If they 'do' what you are looking to do, you can have a lot more faith in the advice they're giving.
There were plenty of financial experts who lost a lot of people a lot of money a decade ago!
We live in a world now of uncertainty - especially regarding tax rules and regulations. What might have been perfectly sound advice one month could be disastrous advice a month later.
In the 12 month period from March 2015 to March 2016, we effectively had four Budgets. As a result, property tax advice given in February 2015 would have been completely inappropraite by April 2016.
That is not the fault of the "experts". That is the fault of governments floundering around trying to fix perceived problems.
In the 12 month period from March 2015 to March 2016, we effectively had four Budgets. As a result, property tax advice given in February 2015 would have been completely inappropraite by April 2016.
That is not the fault of the "experts". That is the fault of governments floundering around trying to fix perceived problems.
TheLordJohn said:
Thanks for replies, gents.
I think it's time to speak to an 'expert' when we return.
The only problem is finding someone who actually walks the walk and knows what they're doing.
If they 'do' what you are looking to do, you can have a lot more faith in the advice they're giving.
There were plenty of financial experts who lost a lot of people a lot of money a decade ago!
If you're not currently in the U.K. then leaving it until you return may mean you miss the greatest opportunity. I think it's time to speak to an 'expert' when we return.
The only problem is finding someone who actually walks the walk and knows what they're doing.
If they 'do' what you are looking to do, you can have a lot more faith in the advice they're giving.
There were plenty of financial experts who lost a lot of people a lot of money a decade ago!
Eric Mc said:
NickCQ said:
Yeah, you need a BTL expert to tell you at what point it makes sense to incorporate a company to own properties rather than own yourself. At some point the tax advantages will outweigh the fixed costs and hassle of running a company (audit, registration, filing and so on).
Most companies have not been audited since 1991.!Gassing Station | Finance | Top of Page | What's New | My Stuff