Now is potentially a good time for buy-to-let landlords to become limited companies, according to accountancy firm MJ Bushell.
Property tax specialists at the company believe that landlords could benefit from the recent stamp duty holiday by incorporating their existing portfolio into a limited company.
The firm sees the temporary increase in the stamp duty threshold for all residential purchases from £125,000 to £500,000, until the end of March next year, as an opportunity not to be missed.
Matt Warwick, tax senior at MJ Bushell, commented: “Although landlords buying additional properties still face a 3% SDLT surcharge on their property purchases, they are not required to pay the standard rate of SDLT on top for homes valued £500,000 or less.
“This also applies to the transfer of properties into a business, which would normally attract a substantial SDLT bill. In fact, the savings could mean they pay up to half as much.”
Landlords operating as a limited company structure means they can benefit from mortgage interest tax relief on buy-to-let properties, which is not the case for landlords classed as individuals.
Warwick added: “Before the SDLT holiday there had been a lot of debate about whether incorporation is the right approach to take and whether it saves sufficient money to merit the switch.”