Moving into full time property development - advice needed/appreciated

[jkd100]

Having completely renovated our current family home in London we are considering selling and relasing capital to renovate properties in our home town in wales.

We luckily stand to make a substantial profit on our current property but this has been our sole property and home. We are now however looking to give up jobs and concentrate on this as full time jobs.

I am hoping to buy repossesed/run down terraced properties and renovate and sell on. I am however aware the market for sales might not provide a quick transaction and we may need to rent out the property while finding a buyer.

I think we are ok on what we physically need to do but are completely unsure about the financial and legal situations, so any advice on this would be appreciated. Eg do we need to pay capital gains tax if we own more than one property or is there a way around this?

If we have to rent the properties rather than sell straight on will this affect anything?

Where can we get good financial advise?

If we are looking to buy cash but then remortage where is the best place to find this finance?

Thanks

J

[Dan_Manchester]

Welcome J,

I'd say you're best bet to consult an IFA for advise. Many estate agents will have mortgage advisors onsite who's brain's you can pick for advice. They generally make money from you getting a mortgage with them but they also get commission on life insurnace policies and so on, therefore they will still spend time with you.

Otherwise, the internet is always a great source of information.

Good luck

[Kaz]

Hi

You don't say whether you intend to buy a house for you to live in as well as one to develop or whether you would live in the development or rent.

If you live in the development, it's classed as your main residence and will not be subject to CGT when you sell. However, if you continued to do this, HMRC would cotton on to the fact that you were developing and they take a dim view of tax avoidance!

If on the other hand, you buy a house to live in and then develop others to sell on, you would pay normal income tax instead of CGT as it's not a one-off. That's what the tax office told me anyway!

If you rent the properties out, you have to declare the rent you receive as taxable income.

Hope that helps for now. Good luck and let us know how you get on