As of April 2017, tax relief available on personal buy-to-let mortgage payments will begin to be cut from 45% to 20% but this won’t apply to limited company buy-to-let products.
Fleet Mortgages will now consider applications where individuals are transferring properties to a Special Purpose Vehicle limited company, provided it falls within the standard lending criteria and the existing owners of the property are directors and shareholders of the limited company.
Solicitors will also be obligated to ensure the lender’s interests are protected appropriately in respect of any insolvency provisions and must ensure that Stamp Duty land tax is paid on the value of the property, based on the lender’s valuation.
Bob Young, chief executive of Fleet Mortgages, said there will be further amendments to criteria announced in the coming weeks.
“The impending changes to tax relief on mortgage interest payments for individuals, due to be phased in from next year, mean that more and more landlords are looking at corporate vehicles such as limited companies to both house their existing portfolio and to purchase new properties within,” said Young.
Fleet offers the type of transfer/purchase through its entire range of limited company products, including a 75% LTV lifetime tracker at 4.19% with a fee of 1.5%.