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Property Development Thread

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View Lyons550's Profile Lyons550 Flag Shirley 21 Nov 17 12.39pm Send a Private Message to Lyons550 Add Lyons550 as a friend

I know a number of the posters on here are Property Developers so thought i'd start a thread to perhaps share experiences, do's / don'ts etc.

I've a couple of places at the moment but made the decision a couple of months back to take a more serious approach, with a view to at least be financially secure from doing so, in turn providing for the missus and kids and enabling to perhaps go part time in my full time job.

I've set up a Company to do this with for tax purposes and am selling one of the properties I already own in order to fund the business moving forward.

Any of you others gone down the SPV (Company) route yet?

What resources do/have you refer(ed) to in order to keep abreast of the market / sector?

Have any of you listened to The Property Podcast? If you haven't i'd highly recommend it.

 


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hedgehog50 Flag Croydon 21 Nov 17 12.43pm

Buy to let developers who buy first time buyer type property to exploit those seeking their first home exacerbate the housing crisis and fuel house price inflation - they should be subject to high rates of taxation as a deterrent.

Edited by hedgehog50 (21 Nov 2017 12.53pm)

 


We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men. [Orwell]

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View Jimenez's Profile Jimenez Flag SELHURSTPARKCHESTER,DA BRONX 21 Nov 17 12.53pm Send a Private Message to Jimenez Add Jimenez as a friend

One of the best way's to make money undoubtedly.$$$

 


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View CambridgeEagle's Profile CambridgeEagle Flag Sydenham 21 Nov 17 12.57pm Send a Private Message to CambridgeEagle Add CambridgeEagle as a friend

Originally posted by Lyons550

I know a number of the posters on here are Property Developers so thought i'd start a thread to perhaps share experiences, do's / don'ts etc.

I've a couple of places at the moment but made the decision a couple of months back to take a more serious approach, with a view to at least be financially secure from doing so, in turn providing for the missus and kids and enabling to perhaps go part time in my full time job.

I've set up a Company to do this with for tax purposes and am selling one of the properties I already own in order to fund the business moving forward.

Any of you others gone down the SPV (Company) route yet?

What resources do/have you refer(ed) to in order to keep abreast of the market / sector?

Have any of you listened to The Property Podcast? If you haven't i'd highly recommend it.

Simple things worth thinking about are who your shareholders are - making kids and spouse shareholders from the start allows them a stake and spreads gains.

Also think about funding the company via a shareholder loan (interest free) rather than equity. That way you can take out cash from rents by way of loan repayments which are tax free.

Beware CGT when putting properties you currently own into a company. This is likely to be a chargeable event, meaning if they are worth more now than when you purchased them you'll have to pay a "dry" tax charge. You may also have to pay SDLT on the transfer. If they are residential and worth over £500k you'll be subject to ATED.

One big benefit of SPV is no restriction on deductibility of mortgage interest

You may well know all of this!

 

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hedgehog50 Flag Croydon 21 Nov 17 12.59pm

Is there a book of tips for tax avoidance strategies for left wing, and/or right wing, (other wings are available) property developers?

Edited by hedgehog50 (21 Nov 2017 1.01pm)

 


We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men. [Orwell]

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View Jimenez's Profile Jimenez Flag SELHURSTPARKCHESTER,DA BRONX 21 Nov 17 1.01pm Send a Private Message to Jimenez Add Jimenez as a friend

Originally posted by hedgehog50

Is there a book of tips for tax avoidance strategies for left wing, and/or right wing, property developers?

Edited by hedgehog50 (21 Nov 2017 1.00pm)

What the f*** is Tax !!

 


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View Lyons550's Profile Lyons550 Flag Shirley 21 Nov 17 1.02pm Send a Private Message to Lyons550 Add Lyons550 as a friend

Originally posted by hedgehog50

Developers who buy first time buyer type property to exploit those seeking their first home exacerbate the housing crisis and fuel house price inflation - they should be subject to high rates of taxation as a deterrent.


Thank you hedge...but you know Property development takes many forms...dont you...

 


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View Lyons550's Profile Lyons550 Flag Shirley 21 Nov 17 1.09pm Send a Private Message to Lyons550 Add Lyons550 as a friend

Originally posted by CambridgeEagle

Simple things worth thinking about are who your shareholders are - making kids and spouse shareholders from the start allows them a stake and spreads gains.

Also think about funding the company via a shareholder loan (interest free) rather than equity. That way you can take out cash from rents by way of loan repayments which are tax free.

Beware CGT when putting properties you currently own into a company. This is likely to be a chargeable event, meaning if they are worth more now than when you purchased them you'll have to pay a "dry" tax charge. You may also have to pay SDLT on the transfer. If they are residential and worth over £500k you'll be subject to ATED.

One big benefit of SPV is no restriction on deductibility of mortgage interest

You may well know all of this!


Thanks Cambridge, yep I think I've covered the Shareholder / Directors Loan part.

The CGT issue for transferring properties into the SPV is exactly why I'm selling it (It's my main residence) before then moving the money into the Company structure and then getting started.

It's taking a while, to get all the ducks in a row due to the increased legislation, taxation issues (which I'm sure Hedge would be pleased to note) however I agree that its only right and proper that wether 'flipping' or building up a portfolio the Government are now squeezing individuals to ensure that it's all above board and they pay their fair share.

I actually WASN'T aware of the bit in bold though, so will look into that some more moving forward.

Thanks

Edited by Lyons550 (21 Nov 2017 1.12pm)

 


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View Lyons550's Profile Lyons550 Flag Shirley 21 Nov 17 1.10pm Send a Private Message to Lyons550 Add Lyons550 as a friend

Originally posted by hedgehog50

Is there a book of tips for tax avoidance strategies for left wing, and/or right wing, (other wings are available) property developers?

Edited by hedgehog50 (21 Nov 2017 1.01pm)

If you simply look on the HMRC website it gives you all the tax advice you would need hedge...that's what I've used.

 


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hedgehog50 Flag Croydon 21 Nov 17 1.12pm

Originally posted by Lyons550

Thank you hedge...but you know Property development takes many forms...dont you...

That's why I put 'buy to let'.

 


We have now sunk to a depth at which the restatement of the obvious is the first duty of intelligent men. [Orwell]

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View Lyons550's Profile Lyons550 Flag Shirley 21 Nov 17 1.16pm Send a Private Message to Lyons550 Add Lyons550 as a friend

Originally posted by hedgehog50

That's why I put 'buy to let'.

Well done, i noticed you'd edited it afterwards.

B2L isn't that bad, people are now preferring to rent rather than own as it gives them greater flexibility.

As a landlord myself i ensure my tenants are happy, have a good communication with them and they know that i'll address anything as soon as possible...and i'm not even charging them the rent I could get, because It's just as important to me to have good tenants.

In turn I know the property is looked after and well maintained.

 


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View mezzer's Profile mezzer Flag Main Stand, Block F, Row 20 seat 1... 21 Nov 17 1.31pm Send a Private Message to mezzer Add mezzer as a friend

I've lived through two cycles now where making "easy" money from property development has just pre-empted a sharp downturn in the property market, wiping out numerous development companies that are not well run nor well enough funded to sit out a period where the market dries up and a quick "turn" becomes a two year millstone around liquid funds that are needed to keep the companiy's profitability oiled.

Not saying not to do it Lyons, and there are some very wealthy people out there who have, but in a decade where the words "that'll never happen" have become the most accurate way to forecast the future, beware of thinking that "that'll never happen" to this property market.

 


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