23rd
Oct 2024
According to a nationwide estate agents, landlords are increasingly setting up buy-to-let companies to benefit from more favorable tax rates.
Image credit: iStock
Limited companies make buy-to-let investments more profitable by avoiding
Capital Gains Tax on property sales.
This issue is particularly relevant now as there is speculation that Chancellor Rachel Reeves may be
increasing CGT in this month’s Budget.
And the rising number of companies set up to hold
buy-to-let properties means the vast majority of new landlord purchases now go
into a limited company.
Already 70% of new buy-to-let purchases in
England & Wales were made via limited companies, with the other 30% bought in personal names.
Last month alone, 5,312 new limited companies were set up to
specifically purchase buy-to-let properties throughout Great Britain.
At the end of 2024, the number of limited companies created is expected to reach
between 60,000 and 62,000, surpassing last year's total of 50,004.
Around 60% of these new companies have been set
up in the South of England.
A spokesperson for the agents, says: “Most new purchases
are now made in a company structure.
“However, there’s also been a significant rise in the number
of landlords moving homes they own in their personal name into a company to
shelter from an increasingly aggressive tax environment.”
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