17th
Mar 2017
According to a specialist bridging lender, there is an increase in buy-to-let landlords who are now buying properties that are classed as semi commercial, to reduce their higher levels of taxation.
Semi commercial properties, 'mixed-use' are safe from a number of tax increases starting in April, and savvy landlords are buying them to offset the stamp duty hike and to provide them with two sources of income.
.A £500,000 buy-to-let property is liable for a duty of £30,000, whereas a semi-commercial property costing the same amount will only incur a stamp duty of just £14,000.
Mixed - used property opens up two types of revenue streams for buy-to-let investors by the nature of the buildings. They provide a business rental income for the commercial part of the structure as well as private rental income from flats above or attached residential accommodation.
The finance company cites two of their latest loans for mixed-use properties one is a pub with a house attached and the other a workshop with rental flats above it.
Scott Marshall, managing director of the finance company, said: “We’re seeing many landlords looking to diversify their portfolios and some are investing in semi-commercial units for the first time. They are keen to take advantage of tax efficient property types and also have another string to their bow when it comes to spreading tax risk.
“With a retail unit and a residential flat above, they are getting longer tenancies for the shop and good rental prices for the flat. We’ve funded conversions where separate entrances have been created for the different parts of the property and occasionally the exit route for the bridging loan has been to sell one of the units and retain the other.
“Landlords and property investors are putting in place a variety of strategies to protect their portfolios from increasing taxation and semi-commercial property has a definite role to play in this as they look for new opportunities.”
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