Limited Company BTL
Buying through an SPV limited company
Using a limited company for a buy-to-let mortgage can be highly beneficial, especially for higher-rate taxpayers or those planning to build a larger portfolio. The limited company is known as an SPV (Special Purpose Vehicle), a limited company created specifically to buy and manage investment properties.
Key Points
- The company owns the property
- The mortgage is in the company’s name
- Rental profits remain within the business unless withdrawn personally
Although the company owns the property, lenders will usually still require directors to provide personal guarantees.
Potential Advantages
- Mortgage interest is usually treated as a business expense
- Profits are generally subject to Corporation Tax
- Supports long-term portfolio growth
- Separates personal and business finances
- Provides a structured approach to property investment
CrowNEST Mortgages can explain how lenders assess personal and limited company buy-to-let applications. However, tax advice should always come from a qualified accountant or tax specialist, as tax treatment depends on individual circumstances and may change in future.
Before proceeding, it is important to understand:
- The tax implications
- Ongoing costs
- Legal responsibilities
- Long-term suitability
CrowNEST Mortgages can guide you through the lending side of the process and work alongside your accountant to help you make an informed decision.
Check out our guide, Buying in a personal name vs an SPV
Your Home (or property) may be repossessed if you do not keep up repayments on your mortgage or any other debts secured on it. Some forms of buy-to-let mortgages are not regulated by the Financial Conduct Authority.
FAQs
Should I use an SPV to purchase a buy-to-let property?
An SPV (Special Purpose Vehicle) is a limited company created specifically to buy and manage investment properties.
For many landlords, investing in property via an SPV is more tax-efficient than investing personally, especially if you are looking for mortgage finance. We do, however, advise you to seek professional tax advice from a qualified accountant or tax specialist, as tax treatment depends on individual circumstances and may change in future.
Is there a minimum time a SPV limited company must have been established to apply?
No, not at all. Technically, the business could have been set up yesterday, so long as it's set up before any borrowing application; that's enough.
How much deposit do I need?
The standard deposit required for a limited company buy-to-let mortgage is typically 25%. However, some lenders will accept a deposit of 15% or 20%.
Which Standard Industrial Classification (SIC) code?
Most mortgage lenders prefer SPVs that are set up purely for property-related activity and registered with suitable Standard Industrial Classification (SIC) codes, such as:
68100 – Buying and selling of own real estate
68209 – Other letting and operating of own or leased real estate
Limited company ownership may offer different tax treatment depending on individual circumstances, so independent tax advice should always be sought.
Contact us
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Office: 01274 265571
alfie@crownestmortgages.co.uk
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