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Tax-efficient way to buy first flat
Comments
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I suggest seeking advice from an Accountant.
You intend to be a professional property developer and need to understand not just how to own the property, but how to set up your business.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Why is it unlikely if we will own it for less than 6 months? That's very important what you wrote, please let us know. We never hear about such problem.Very unlikely anyone will get a mortgage on it if you've owned it for less than 6 months (longer with some lenders).
To others asking:
I confirm, 35k.
Lease is very long, 980 years left.
Service charges are about 75 for a month.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
We have been chatting on about buying a flat for a while now, have you found the right one yet?
If you have never heard of such a problem about selling a property within 6 months of purchase then you need to do some more research on buying and selling property in the UK - when you sell within 6 months your buyer will find it difficult to get a mortgage on it.
Have you factored in ERC and set up fees into your profit/loss on your business venture?
https://forums.moneysavingexpert.com/discussion/5812585/buying-flat-from-auction-a-few-questions
https://forums.moneysavingexpert.com/discussion/5834403/question-about-property-from-auction
https://forums.moneysavingexpert.com/discussion/5786333/first-mortgage-loan-to-buy-flat-from-auction0 -
Weird that, as I'd already told you in the first link that foxy-stoat gave. They've also answered your question. It really is very basic stuff that you should be aware of as a 'property developer'. I would consider renting it out for a year if that's at all possible. Or pull out completely (unless you've exchanged, which I presume you haven't).szyblaszczyk wrote: »Why is it unlikely if we will own it for less than 6 months? That's very important what you wrote, please let us know. We never hear about such problem.2024 wins: *must start comping again!*0 -
Somehow we missed that 6-months period, I just read more about it, thanks. Unlikely but not impossible. Anyway, not a big deal and there are still cash buyers. Some time for renovation, some time for finding a buyer. We can also rent it out for the short-term.Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0
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unless it needs alot of work be careful. those looking at renting a £35k - 50k property may not be the sort of tenant you want short term as you may end up losing moneyAn answer isn't spam just because you don't like it......0
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If it's a 980 yr lease, suggests the flat is less than 20 yrs old and £35K is a very low price.If you are querying your Council Tax band would you please state whether you are in England, Scotland or Wales0
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If by short term you mean that you'll want it back in less than a year then this isn't as possible as you may think.szyblaszczyk wrote: »We can also rent it out for the short-term.
You can't serve an eviction notice to end earlier than 6 months into a tenancy, and then if the tenant doesn't want to leave it could take up to 40 additional weeks to legally get them out of the property.0 -
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since you use the words "first flat" that implies a very clear intent to repeat the process of buying and selling. That therefore makes you a property developer subject to income tax on your trading profits, not a property investor subject to CGT
the only way to be assessed for CGT is to be an investor, which would mean holding the property (and better yet letting it out) for a "reasonable" period of time so you are holding an investment, not just flipping a refurb.
go see an accountant if you want tax advice, particularly if you are not a native0
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