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Monday, July 11, 2016

Tax benefits of joint buy-to-let mortgages

With the new buy-to-let tax changes coming into play in 2017, landlords will be looking to off-set their increased levy payments.

In some circumstances, it may be beneficial for landlords to own their properties jointly with a spouse.
Profits derived from the property would be split between both applicants and if the spouse is in a lower tax bracket, this could reduce the overall tax bill.
It is important that landlords always seek professional advice regarding their individual tax affairs to assess the best way to deal with their buy-to-let investments.

First-time landlords or first time buyers.

A person who has never owned a property, either to live in or let out, may find only a limited choice of buy-to-let mortgages available to them.
However, a wider range of finance options becomes available if they apply jointly with an existing owner-occupier or landlord. Most lenders only require that the first applicant currently owns a property.
For example, young adults who either cannot afford to buy their own home or prefer to rent, may jointly purchase a buy-to-let property with one of their parents in order to get a foot on the property ladder.

Pooling resources

Although it is possible to get a buy-to-let mortgage at 85% loan-to-value, these products are more expensive and options are limited.
However, applicants with a larger deposit will have access to a much wider and cheaper selection of mortgages.
By pooling their resources, joint applicants may find themselves better off with more upfront to invest in their buy-to-let business.

To discuss your buy-to-let mortgage requirements please contact the Property Hawk Mortgages team on:

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