Limited companies can buy any type of property, for a variety of purposes. This could include: Commercial properties to use for your business purposes, like warehousing space, a store, an office, a studio, etc. Residential properties as an investment, such as the house that you live in. Residential or corporate properties to rent to others.. An LLC is a legal entity that many investors form to buy rental property. Advantages of owning property in an LLC include reduced personal liability in the event of a lawsuit or creditor claim and the ability to invite members to join the LLC. Lenders may balk at providing financing to an LLC for the same reasons an investor forms an LLC.
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Investing through a limited company structure incurs two major tax bills – capital gains tax and stamp duty, which can negate any benefits from tax relief, particularly for landlords with just a small number of properties. These factors must be weighed up in order to determine which is the best set up for you and your property investment.. For private landlords, profits from rental income are taxed via income alongside your other earnings. However, if you choose to buy property through a limited company, the profit you make will be liable to corporation tax instead. Corporation tax is currently 19%. Additionally, private landlords can no longer deduct their mortgage expenses from.