Updating post from Reddit.
Hello, I need some advice.
I am looking to buy another property as me and my wife are outgrowing our place. I want to keep the first property as an investment. I have seen the tax on additional property and it’s about 33k tax! As well as deposit of around 44k. I am thinking to put 5% down to just free up some cash.
I need advice on if i’m doing this right or if i’m missing anything? Would it be better to turn the first house into a company name and buy it like that?
Also what are the rules on rent, and mortgage? My mortgage on my first place is coming up can I keep this as a residential mortgage and still rent out?
Appreciate it if anyone has any advice!
Thanks
T
You'll still pay Stamp Duty on the transfer/sale from an individual to a business. The business would come with additional expenses which may make it not financially worth it, especially depending on your and your wife's income tax band.
You would also very likely need to convert from a residential to BTL mortgage within a certain timeframe (it's possible to let out with a dispensation from your mortgage provider but these are normally short-term).
Have you looked into how much you would expect to make, after expenses and tax? It is quite likely that with a single property you would be better off selling it, investing, and drip-feeding the money into ISAs over several years rather than renting it out. The margins are quite fine, and can often be beaten elsewhere.