What does Osborne’s Budget mean for property?

Property Partner investors are set to benefit

After Osborne announced his plan to ‘level the playing field’, individual buy-to-let landlords will be hit by harder taxes.

However, the story is slightly different for those who invest with Property Partner – in fact, it’s positive.

Here’s a summary of changes to the Budget, with reasons why it’s now even easier for us to help you get more out of property:

  • Tax relief is being reduced for individual buy-to-let landlords, which will not be music to certain ears. Relief will be cut from the higher tax brackets of 40% and 45%, and restricted to 20%. This means more tax to pay for high earners that are landlords.
    As properties on Property Partner are held through a Special Purpose Vehicle (a UK limited company), this will not apply. Most investors will actually pay less tax, thanks to the new dividend allowance – which we will now explain…
  • The 10% dividend tax will be abolished for UK taxpayers from April 2016, and a £5,000 annual dividend allowance will be introduced instead. Anyone who invests less than around £150k in share investments will pay no tax on their dividends (assuming approx 3% yields).
    This means Property Partner investors will pay less (if any) tax on their dividends.
  • Corporation tax will be reduced from 20% to 19% in April 2017, and to 18% by April 2020.
    Thanks to this, our investors will receive higher dividends from their property investments.
    Our properties are held by SPVs, which means this reduction in corporation tax applies to them.

In summary, the new taxes for individual landlords will not apply to our properties. Instead, the new dividend allowance should reduce the tax burden for most of our investors.

If you’re an investor with us – congratulations. If you’re not, take advantage of these changes, and start building your own property portfolio with us, here.