Limited company buy-to-let mortgages
Why more landlords now buy through an SPV, what lenders look for, and when staying personal is still the better choice.
What is a limited company buy-to-let mortgage?
It's a buy-to-let mortgage taken out by a company, usually a special purpose vehicle (SPV) set up only to hold property, instead of by you personally. The company owns the property, receives the rent and pays the mortgage. You, as director and shareholder, give the lender a personal guarantee.
Why landlords use a limited company
1. You can usually borrow more
Lenders test a company's rent at 125% interest cover. Higher-rate taxpayers borrowing personally are usually tested at 145%. On the same rent, that's roughly 16% more borrowing through a company. Try both in the buy-to-let mortgage calculator.
2. Mortgage interest is a full business cost
Since Section 24 was fully phased in, individual landlords can't deduct mortgage interest from rental profit. They get a 20% tax credit instead. A company deducts the interest in full, then pays corporation tax on what's left (19% on profits up to £50,000, rising to 25% above £250,000).
3. Profits can stay in the company
Profits kept in the company to fund the next deposit are taxed only at corporation tax rates. Taking money out as salary or dividends is taxed again, so the benefit is biggest for landlords who are still growing a portfolio.
What lenders look for
- An SPV with property SIC codes: usually 68100, 68209, 68320 or 68201. Many lenders also accept trading companies, for a narrower product range.
- Personal guarantees from directors and shareholders, typically any holding 20–25% or more.
- A 25% deposit as standard (75% LTV). Some lenders go to 80%.
- Directors' experience and credit. First-time landlords can use an SPV, but have a smaller choice of lenders.
The downsides
- Rates and fees are usually a little higher than for personal buy-to-let, although the gap has narrowed a lot.
- Running a company means accounts, a confirmation statement and corporation tax returns, so there's an annual accountancy cost.
- Moving property you already own into a company counts as a sale. It can trigger stamp duty (including the surcharge; check it on our stamp duty calculator) and capital gains tax. Incorporation relief is only available in limited cases. Take tax advice first.
Is it right for you?
Broadly, a company tends to suit higher-rate taxpayers, landlords building a portfolio, and anyone who wants to reinvest rental profit. Basic-rate taxpayers with one or two properties they already own often do better staying personal. We arrange the finance and work alongside your accountant, who should confirm the tax position.
Compare limited company buy-to-let rates
See live SPV products on our sourcing tool, or tell us about the purchase and we'll come back with the lenders that fit.
Start a limited company enquiryFrequently asked questions
Can a new limited company get a buy-to-let mortgage?
Yes. Most specialist lenders lend to a newly set-up SPV. They assess the directors' experience, income and credit instead of company accounts.
What SIC code do I need for a buy-to-let limited company?
Lenders usually want 68100 (buying and selling own real estate), 68209 (letting own property), 68320 (managing real estate) or 68201 (renting and operating housing association property).
Are limited company buy-to-let mortgage rates higher?
Usually slightly, often by 0.1%–0.5%, although some lenders now price SPV and personal buy-to-let the same. Being able to borrow more on the same rent often outweighs the difference.
Do I need a personal guarantee?
Almost always. Directors and significant shareholders guarantee the company's mortgage, so you remain personally liable if the company can't pay.
Should I transfer my existing buy-to-let properties into a limited company?
Not without tax advice. The transfer is treated as a sale at market value, so stamp duty and capital gains tax can apply, and you'll need a new mortgage in the company's name.