How to invest in property without becoming a buy-to-let landlord… and even do it tax-free with an Isa
For two decades buy-to-let was the golden child but after sweeping tax reforms it’s rapidly losing its shine.
An extra 3 percent on stamp duty rates has thrown up a barrier to entry on top of the cost of a deposit. Invest in a £200,000 buy-to-let now and not only will you need a £50,000 deposit but you’ll also pay £7,500 in tax – compared to £1,500 as an owner-occupier.
Meanwhile, the loss of full tax relief means landlords can’t offset all your mortgage interest against income tax bills on rent – gobbling up returns.
But the lure of British bricks and mortar remains, with thousands of small investors still looking for a way to invest in residential property – so are a new breed of services worth considering?
Buy-to-let has, without doubt, got harder to get into due to a combination of high house prices bumping up deposits, more onerous rent-to-mortgage requirements shutting out some properties, and that hefty stamp duty hit.
Meanwhile, many longer-term landlords have chosen to sell up their properties as the loss of tax relief on mortgage interest makes figures much harder to stack up and increase the temptation to take the profits from years of rising house prices.
Yet ask the man or woman on the street about what the best investment might be and property will always come near the top of the answers.
As a result, a number of new firms have popped up claiming to give investors exposure to residential property without the hassle of becoming a full-time landlord.
There are a range of ways on how they achieve this, but predominantly these start-ups allow you to become either a peer-to-peer investor who lends to landlords and property developers or to invest in a share of a property alongside other investors.
Some offer Isa investing, others do not.
Source & Full article: DailyMail