One of the ways in which we support our clients involves the creation of leases on multi-freehold blocks. Read on to find out more about this strategy and please do get in touch if you would like to discuss this further.
How can investors grow their portfolios by splitting the title on multi-freehold blocks of houses or flats?
A number of cases we have completed recently involve the creation of leases on multi-freehold blocks of houses or flats. In this scenario an investor purchases a freehold block (house or flats), adds value and grows their portfolio by subsequently splitting the title and putting the units on individual leases.
What are the benefits of doing this?
For example, for a residential block of flats, or semi-commercial property with a flat above a shop or office, you may be able to purchase the freehold at a reduced price and will be subject to either multiple dwelling relief or the commercial rate of stamp duty. Leases can then be created and the units sold or refinanced to potentially allow additional capital raising. The benefits of this include valuers potentially valuing each of the single units higher than they would a larger block, sales of individual units can be completed without a complicated refinance process, and the option to release equity to further grow your portfolio. By processing changes through the use of a subsidiary company, these transfers should be considered group structure transactions and exempt from further stamp duty.
How can we help with this type of transaction?
Whilst this may seem like a complicated option for property investment, we have significant experience and expertise in this type of transaction and the intricacies involved. We always advise that you seek legal and accountant assistance with these complex transactions for confirmation of the required company structure and Stamp Duty Land Tax, however we are more than happy to discuss further and can arrange the finance side with ease. Please get in touch if you would like to find out more:
01225 800849