Costs & Taxes
Limited Company Buy-to-Let
Purchasing properties through a company structure
Full Definition
Holding buy-to-let properties in a limited company (SPV) allows full mortgage interest deduction against profits, avoiding Section 24 restrictions. Corporation tax applies instead of income tax. However, mortgages may have higher rates, and extracting profits incurs dividend or salary taxes. Professional advice is essential for the decision.
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Stamp Duty Land Tax (SDLT)
Tax paid when purchasing property over £250,000
LBTT (Land and Buildings Transaction Tax)
Scottish equivalent of Stamp Duty
LTT (Land Transaction Tax)
Welsh equivalent of Stamp Duty
Capital Gains Tax (CGT)
Tax on profit when selling investment property
Section 24 (Mortgage Interest Relief)
Restriction on mortgage interest tax deductions for landlords
Ground Rent
Annual payment to freeholder for leasehold properties