TLE

Online Property ISA Gains Tax Efficient REIT Status

By Bea Patel, TLE Property Editor and Director of Shop for an Agent

With property prices increasing rapidly, many are priced out of the market. Cash based savings are underperforming making it harder to save money.

A new online Property ISA lets you invest in property from £100. Launched in the latter part of 2016, it has been awarded Real Estate Investment Trust (REIT) status for its first fund, bringing greater tax benefits to anyone who chooses to invest through its platform.

The addition of the REIT status means that on top of the tax efficiencies of the ISA, customers do not pay corporation tax on returns from property. This means that, like owning a primary house directly, you pay no tax on gains in property value and no tax on rental income.

A first for the UK investment market, Bricklane.com makes investing in property as easy as saving through a Cash ISA, while reaping benefits of the property market through rental income and changes in property values. With some unable to invest in property as a buy to let investor, could this be an alternative viable option?

Founder, Simon Heawood, explains: “We are currently in a situation where more and more first time buyers are struggling to save for deposits and cash based savings are under performing. Ordinary people are looking carefully at how they save for their future and our residential Property ISA allows them to invest in a market that has previously been out of their reach. The addition of REIT status adds to the attraction and makes the expected net yield of 3.4 per cent even more tax efficient.”

You invest £100 with monthly contributions from £50 per month. The money is pooled from investors in a REIT, which buys properties currently in Leeds, Manchester and Birmingham. Properties are rented out and you earn a share of the rental income. Your investment also tracks changes in the values of the properties owned.

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