Advice please, buying second property and letting out current one



New Member

My partner and I currently own a property with a mortgage. Bought for 385k, current value: 375k.

We have a semblance of plan to buy a second property for about 600k to live in, and rent out our current property.

What is the most efficient way to do this wrt. SDLT etc.

The idea we had was to sell the current property to a limited company for market price. As I understand, this would incur higher rate SDLT of 20k.

But this would mean that we would not pay higher-rate on the new purchase (20k Vs. 38k).

Total SDLT: 40k

This is higher (38k) than if we just bought the second property, but means we could run the rental property more efficiently.

Any and all advice is appreciated.


When you say that you can “run the rental property more efficiently” are you referring to the fact you can offset mortgage interest against company income whereas the situation is changing for personal rental income? You may want to investigate company mortgages before you take any action. My understanding is they are not as simple as some people think.


The idea looks well thought out and interesting. However, as mentioned above, I think it is a little more difficult than you might expect to get mortgage type loans for a business. Could be wrong but I think it is a bit harder.


Conrad, am I right in saying you can offset ALL mortgage interest against rental income if bought within a company - I know the rules are changing for personal investments.

Conrad Paton

Hi Post,

Yes, that is my understanding. Also you can offset the mortgage set up costs as an expense aswell I believe.

As you rightly say, personal investments expenses have changed.


Active Member
Aside from trying to put private investors off buy to let, I am not sure why the government chose to introduce this particular change? They must have known they would never be able to impact the offset process within a company so why target private investors?

Conrad Paton

Like most things in politics it's about winning votes.

By claiming they are helping 1st time buyers, by implementing more taxation for BTL investors the general public think the government is 'clamping down' on people making excessive money from property.

Therefore people, such as 1st time buyers are more likely to keep the party in power that comes up with additional taxation for investors.

A bit of extra cash into the treasury as a side effect is just a bonus?

Do you agree?


Active Member
I think the term "smoke and mirrors" covers it lol

The property market has been milked dry by successive governments although these fund raising excerises (which is what they are) are often portrayed as balancing the needs of first time buyers and reducing the profits of the big bad property investors. As you say, attracting more votes from the public - they get into power and the cycle starts again as we lead up to the next election.