Looking for advice on how best to go about purchasing new home

[What_to_do]

Hi all,


My first post so here goes.



Firstly, some background ...


Investment Property 1
Value: €380k
Mortgage: €190k
Rent: €1700/month
Mortgage Repayments: €370/month (1.75 + English Central Bank; interest only for term)

Investment Property 2
Value: €400k
Mortgage: €540k
Rent: €1800/month
Mortgage Repayments: €805/month (.8 + ECB; interest only for term)

PPR
Value: €280k
Mortgage: €320k
Mortgage Repayments: €1865/month (.75 + ECB; 15 years left)

Personal Savings: €250k
Limited Company Account: €120k

No other debts apart from mortgages


My husband and I are both IT consultants and get paid into our company account and draw a small salary from there. We make approx €200k/year between us.
We are interested in buying a new PPR which will cost approx €500k.
I am looking for advice on how best to go about this.

My plan is to sell property no. 2 above to our limited company once company can afford to buy (prob. end of next year). We get the €400k from the company, add some savings to that and buy our house for cash. Obviously selling current PPR above and bridging whatever negative equity we need to. We’ve then no mortgage on PPR and can start saving to pay off the 2 investment mortgages.
What am I missing here?


Many Thanks for any advise on above plan or any other ideas.

 

[44brendan]

My plan is to sell property no. 2 above to our limited company once company can afford to buy

Mortgage company are unlikely to approve this proposal, unless the full 540K is cleared.
This is mainly what you are missing. You need some tax advice also as you are proposing to extricate additional funds from the company, which is virtually impossible to do without payment of income tax.
In my view there are a number of fatal flaws in the strategy as proposed by you.

 

[bazermc]

Dont put a property into a company - that is tax crazy.

 

[Dub85]

Mortgage company are unlikely to approve this proposal, unless the full 540K is cleared.
This is mainly what you are missing. You need some tax advice also as you are proposing to extricate additional funds from the company, which is virtually impossible to do without payment of income tax.
In my view there are a number of fatal flaws in the strategy as proposed by you.

Often possible to liquidate the company and then pay CGT rather than income tax. Agree, needs a tax advisor.