introducing steve mears – independent financial advisor the money man
Venturing into new market sectors
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It has been a punishing couple of years for the buy-to-let market with tax changes and tougher lending criteria weighing heavily on profits. But, as experienced brokers, we have a unique opportunity to support our clients as they explore new investment options beyond the traditional residential properties.
” “ … landlords who are new to this part of the market will value the guidance and professional contacts that we can offer … These changes do not apply to commercial properties and, for mixed-use properties, the commercial part of the property will be exempt from the changes. Essentially, you will still be able to claim tax relief for loan finance costs relating to the commercial part of the property. Again, we recommend that you seek professional advice on both Tax and Legal matters, before entering into any contracts. One of the biggest challenges for landlords will be identifying the right properties and tenants for their new commercial or semi-commercial investment venture. Here they will need to carefully balance risk against yield, i.e kebab shop vs Supermarket! Also, you still have to pay the business rates, whether they are occupied or not. This is just a snapshot of the complexities involved in buying a commercial property, and please feel free to call one of our team or speak to us tonight, to arrange a meeting. Happy bidding and we look forward to hearing from you.
Experts report that a growing number of BTL landlords are venturing into new territory, to try their hand in the commercial and semi-commercial property. It is easy to see the appeal of leasing property to businesses rather than residential tenants, with higher potential yields and a more favourable tax treatment. Yet there are plenty of risks to consider and landlords who are new to this part of the market will value the guidance and professional contacts that we can offer. It is not something to go into lightly and landlords need the right support and professional assistance. This is where our link with specialist lenders and brokers can be worth their weight in gold. Given the tax treatment of commercial and semi-commercial properties, it is easy to see why this looking like an attractive option. However, for landlords who are used to the residential sector it is a whole new ball game. For example, there is the difference in stamp duty. E.g. Both commercial and mixed-use properties are exempt from the 3 per cent surcharge. Therefore, flats above shops, for example, avoid the extra stamp duty. The second big tax advantage behind the trend towards commercial property investment is the continued ability to offset mortgage interest against profits. With residential BTL, of course, the gradual erosion of tax relief on mortgage costs is already under way and by 2020 this perk will have disappeared altogether.
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Please remember YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE .
to contact Steve, email info@stevemears.com , telephone 0117 973 4300 or to find out more about Steve Mears Independent, visit www.stevemears.com
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