50% tax relief on shares in the new Property118 portal

Updated 7th July 2015 – First published on 30th April 2015

Property118 Portal Limited is a new start up business hosted on the established Property118.com website. It seeks to attract investment of £150,000 in return for 10% of the shares in the new company.

The Property118.com website now serves two separate businesses owned by two separate companies. The nature of the relationship between these businesses and companies is documented in a contract which is available on request.

The Property118.com website provides an online community platform with a mission to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents. It was established in 2011 and is an official Google News feed as well as being a leading forum in the UK Private Rented Sector.

The new company now seeking crowd funding (Property118 Portal Limited) is focussed exclusively on advertising tenanted property for sale. The portal pages became operational on the home page of the Property118.com website in mid April 2015.

Buyers search by postcode or Town and simultaneously set up email alerts so they are notified when a property matching their purchasing criteria is listed.

Consider how much money buyers and sellers of tenanted property could save in terms of rental voids and agents fees as a result of buying and selling with reliable tenants in situ.

Have you ever come across a tenant who is happy to be served notice because their landlord wanted to sell? What if they don’t have to leave?

Basic advertisements are FREE for both landlords and agents to create.

Premium listings feature at the top of search results.

Sponsorship of a featured property Newsletter is available to agents and developers on an ex-gratia, meritocratic basis, i.e. sponsors who make the largest payment per enquiry receive preferential placement of advertisements.

Tax Advantages

When shares in Property118 Portal Ltd become available to purchase via our nominated crowd funding platform investors will attract a 50% tax credit on all shares acquired, e.g. buying £10,000 of shares would reduce your tax bill by £5,000 regardless of what rate of tax you pay. Furthermore, if/when those shares are sold there will be no CGT payable either, regardless of the amount of the gain. This is because the company will qualify for SEIS (the Seed Enterprise Initiative Scheme) which also means that investors are able to roll capital gains into the scheme to offset the other 50% of their investment against CGT, this includes rolling over gains realised from the sale of BTL property. In other words, the shares could end up being acquired at a net cost of zero, or to put it another way, the tax relief you get back on the investment could be as much as the investment itself!

The idea for the new property portal, which came from Svetlana Alexander CIMA MA (wife to Property118 founder Mark Alexander), is a completely ring fenced business in its own right.

Marketing is planned to extend well beyond the existing Property118 reader base and will reach out to both buyers and sellers of rental properties, and of course their agents.

Initial funding of the brand awareness campaign (£25,000 pcm over TV and other forms of media) will be raised by selling 10% of the shares in the new company via an FCA authorised crowd funding platform.

Within seven days of launching a similar campaign (promoted via Property118) LettingSupermarket.com reached its £250,000 fund raising target. Demand for shares in the Property118 Portal are anticipated to be even higher, hence we are giving Property118 members the heads up to register their interest now.

The Market

According to research conducted by Paragon Mortgages Plc. there are five million UK properties owned by private landlords.

“An army of two million private landlords now own and rent out five million properties, according to the report by mortgage lender Paragon. This means 18pc of households now rent from private landlords. And the proportion is growing, as investors continue to see property as a source of future income and profit.” Source The Telegraph 22nd October 2014

The Private Rented Sector has been growing rapidly since the phase “buy-to-let” was first coined by the Association of Residential Letting Agents in 1996. The sector is projected to continue to grow, at least in part due to over 55’s seeking better returns from their pension funds which can now be liberated and used to fund alternative asset classes such as rental property to provide income in retirement.

It is estimated that upwards of 200,000 rental properties change hands in the UK every year. When tenants learn that their home is on the market via conventional estate agents, and advertised on portals such as Rightmove and Zoopla, they are immediately spooked into looking for somewhere else to live. In many cases the owners suffer rental voids due to the expectation of properties to be sold with vacant possession. Purchasers then suffer rental voids until the property is re-let. With the new portal it does not have to work this way. Once tenants realise that their property is being sold tenanted to new landlords they can rest assured that they do not need to start looking for a new home because it is being sold to another landlord.

In most cases landlords do not buy enough life insurance to repay their mortgages, which means their families need to sell some or all of their properties when they die in order to repay mortgage lenders. Even if every landlord sold none of their buy-to-let properties prior to death, and if we assume that death will probably occur within 60 years of becoming a landlord, that’s 33,333 landlord deaths a year and circa 83,333 property sale related dilemmas to be considered, i.e. whether to sell conventionally with vacant possession or tenanted. Not all landlords will hold onto their BTL properties until the day they die so it stands to reason that far more rental properties change hands every year.

These figures are supported by the following data from HMRC which was published on 21st April 2015.

“Number of residential property transaction completions with value £40,000 or above for the tax year 2014-2015 = 1,204,320”

Based on 18% of all households being in the Private Rented Sector (according to data produced by Paragon Mortgages Plc) this suggests that 216,777 sales fall into the target market for the Property118 portal every year.

Other

The key point of difference between the Property118 Portal and the likes of Rightmove and Zoopla is that it advertises rental properties only. Furthermore, the portal is available to both agents and owners to use without the requirement of a premium membership.

Voting shares in the new advertising portal (Property118 Portal Limited) will be offered subject to a minimum £1,000 investment, whilst shares without voting rights will be subject to a minimum investment of just £10. The company will be seeking to raise £150,000 in return for 10% of its shares in order to finance initial costs of brand awareness marketing until such time as cashflow is projected to turn positive. Shareholders will be invited to invest on the basis of receiving dividend income during their lifetime and as a legacy for their heirs. This is not to say that a trade sale or flotation could not be considered in due course by voting shareholders. 

For legal, compliance and commercial reasons we are unable to share too many details of the business plan at this stage. However, to ensure you don’t miss out on the opportunity to snap up shares as soon as they are released please register your interest in investing into this new business venture by completing the form below. We will then notify you as soon as the option to obtain a copy of the business plan and to buy into the business is launched on the Crowd Cube funding platform.

Oops! We could not locate your form.

50% tax relief on shares in the new Property118 portal – http://t.co/H2oH8kNDWW

— Mark Alexander (@iAmALandlord) April 30, 2015

Share This Article