11th August 2015 Crowdahouse

Mortgage Tax Relief -The Dangers of Buying Property in Your Own Name

Owning via a Limited Company Has Never Made More Sense

Like most buy-to-let investors, most of my own buy-to-let properties were purchased in my name. Before the global crash it was easy to get finance as an individual but hard to get it as a company without giving personal guarantees. There were probably twenty lenders for personal borrowing for every one that would lend to a limited company. Few investors took the company route when buying.

Fast forward to 2015 and the Government has changed the rules on tax relief for personal buy-to-let properties when claiming mortgage interest. Actually, it’s confusing to call it a ‘relief’ – it isn’t; it’s a chargeable business cost. The ability to add this cost of borrowing to the rest of your business costs when operating as a landlord is now being phased out.

A Limited Company Can Still Claim ALL Business Costs Against Tax

For the first time in years, it makes more sense to buy and hold property as a limited company. Why? Because although the Government are arguing that owning property in your own name is an investment, even when you’re also running a business as a landlord, this argument doesn’t cross into company ownership. To do so would upset too many principles of business – after all what is a company for if not to conduct business?

What does this mean for property investors? From now on, it no longer makes sense to buy property as an individual if using borrowing to finance the purchase. But, what about the fact that lenders have yet to catch up with the new rules?

It’s likely that buy-to-let lenders will follow the borrowers and find creative ways to lend to corporate entities, although the cost of that finance is likely to be higher.

We Actively Promote Investment via a Limited Company

At Crowdahouse we only lend to professionals, so it makes sense to purchase your next property via a limited company and use crowdfunding peer-to-peer lending to do it. At the end of the term you choose you can always put the loan out to tender with a new crowd or via a mainstream lender once the options for company borrowing have increased.

Buy Your Next Investment Property With a Crowdfunded Loan

To find out more about how to borrow with a limited company via Crowdahouse read our Borrower FAQs or fill your outline borrower’s form here.

  • Gary Corben

    CEO and Co-Founder of Crowdahouse.com

    Gary Corben
  • Gary Corben

    CEO and Co-Founder of Crowdahouse.com

    Gary Corben

About Crowdahouse®
Crowdahouse is a business-to-business (B2B) property crowdfunding platform lending to business borrowers, always secured against property. Instead of lending to individuals, we’ve reduced the risk by offering you the chance to lend only to property businesses. You join a crowd to lend money in return for interest on your money. Your loan is secured with a first charge over property, just like a bank, and you pay no fees as a lender.

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