Economic tip: Landlords must take advantage of the stamp duty holiday and become limited companies

In this way, landlords can save a large amount of money.

Owners should take advantage of the stamp duty exemption by incorporating their existing portfolio into a limited company, property tax specialists from accounting firm MJ Bushell have urged.

The temporary increase in the stamp tax threshold from £125,000 to £500,000 means that homeowners can make significant savings on joining when they would normally have to spend a considerable sum of money.

Landlords can benefit from mortgage interest tax relief on buy-to-let properties.

Matt Warwick, MJ Bushell tax expert, said: “Although homeowners buying additional properties still face a 3% SDLT surcharge on their property purchases, they are not required to pay the standard SDLT rate on top of homes valued at £500,000 or less.”

“This also applies to the transfer of property to a business, which would normally attract a substantial SDLT invoice. The savings could mean they pay up to half.”

“Being in a limited company structure means that homeowners can take advantage of the tax relief on mortgage interest on properties they buy to rent, which is not the case for homeowners classified as individuals.”

“I don’t think there is a better time than this for landlords to become limited companies. The benefits and advantages of this change are many; although not everyone understands how a limited company works, or how its benefits are reflected.”

Landlords could save up to £ 15,000.

Warwick added: “Before the SDLT holiday there was a lot of debate about whether incorporation is the right approach and whether you save enough money to deserve the change,” he added.

“Now, however, it is clear to see that homeowners can take advantage of higher allocation and lower property prices to expand their property empires.”

“This change will especially benefit those landlords with multiple properties, although those with only one or two may also benefit from becoming a limited company.”

“Of course, each person’s situation is different, but with a potential savings of £15,000 in property stamp taxes, there is surely no better time to reevaluate your position and consider incorporation. With just six months or less of relief available, investors must act soon.”

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