Limited Company Buy-to-Let Mortgages: SPV Setup, Lenders and Tax
Updated 2 November 2026
If you are buying or refinancing rental property or HMO through a limited company, the mortgage process works differently from a personal buy-to-let application. This page explains how lenders assess limited company cases, what structure they expect, and what you need to prepare. Mortgage One is a whole of market mortgage adviser arranging limited company buy-to-let mortgages for landlords buying or refinancing through an SPV.
For a free initial consultation about a limited company buy-to-let mortgage, call 01202 155992 or contact Mortgage One.
Why landlords buy through a limited company after Section 24
Landlords use a limited company because Section 24 limits an individual's relief on mortgage interest to a 20% tax credit, fully in force since 6 April 2020, while a company deducts the interest in full before corporation tax of 19% to 25%. For a higher-rate landlord, that difference can decide whether a buy-to-let makes a profit after tax.
The number of landlords purchasing through limited companies has increased significantly since the full introduction of the Section 24 finance costs restriction in April 2020. Under Section 24, individual landlords can no longer deduct mortgage interest as an expense from rental income. Instead, they receive a basic-rate tax credit of 20% on finance costs. For higher-rate and additional-rate taxpayers, this can substantially increase the tax payable on rental profits.
A limited company is not affected by Section 24. Mortgage interest remains a fully deductible business expense when calculating corporation tax. The current corporation tax rate is 19% for companies with taxable profits of £50,000 or less, rising to 25% for profits above £250,000, with marginal relief applied between those thresholds.
The gap widens from 6 April 2027, when income tax on property income for individuals in England, Wales and Northern Ireland rises to 22%, 42% and 47%, with relief for residential finance costs given at the 22% property basic rate. Profits kept inside a company are outside that change, although dividends drawn from 6 April 2026 are taxed at 10.75% in the basic band and 35.75% in the higher band.
This difference in tax treatment is the primary reason many landlords now set up a buy-to-let limited company for new purchases. However, the decision to use a limited company depends on your individual tax position, how you plan to extract profits, and whether you intend to retain earnings within the company or draw them as dividends. Tax treatment varies according to individual circumstances and is subject to change. You should take advice from a qualified accountant before deciding on the most appropriate ownership structure.
How to set up an SPV that buy-to-let lenders will accept
Set up the SPV as a new private limited company at Companies House with property SIC codes, usually 68100, 68209 or 68320, and no other trading activity. Lenders then expect the directors and shareholders to match, a personal guarantee from each of them, and a business bank account open before the mortgage application goes in.
A special purpose vehicle (SPV) is simply a limited company that exists only to buy, hold and let property. If you have not yet set up a company, it is worth understanding what lenders expect before you incorporate. Getting the structure right at the outset avoids complications at the mortgage application stage.
· Register with the correct SIC codes. Companies House lists 68100 as buying and selling of own real estate, 68209 as other letting and operating of own or leased real estate and 68320 as management of real estate on a fee or contract basis. Adding these at incorporation is straightforward and ensures lender compatibility.
· Keep the company clean. Lenders prefer SPVs with no trading history outside of property. If your company has other business activities, some lenders may decline or apply stricter criteria.
· Director and shareholder structure. Consider who will be named as directors and shareholders. This affects personal guarantees, tax planning and succession. Some lenders cap the number of directors, often at four, or require all shareholders to be named on the mortgage. Keystone Property Finance accepts up to four directors, and Fleet Mortgages needs every director and any shareholder with 25% or more to be party to the mortgage.
· Bank account and timing. Open the company bank account early. Some lenders ask for it to be in place before an application, and a newly registered company may need a few working days on the register before a case can be keyed.
· Company accounts. New SPVs with no trading history are accepted by many lenders. For established companies, lenders may request the latest filed accounts alongside the application.
Layered structures, where the SPV is owned by another company rather than by individuals, narrow the lender pool further. Most mainstream limited company lenders want to see the people with significant control named on the application, so keep the shareholding simple unless your accountant has a clear reason not to. Fleet Mortgages is one lender whose criteria guide says multi-layered company structures can be considered.
How much deposit does a limited company buy-to-let need?
Most lenders want a deposit of at least 25% for a ltd company buy-to-let mortgage, a maximum loan-to-value of 75%, and a few go to 80%. The company also pays stamp duty with the 5% surcharge on the whole price, so a £200,000 purchase in England needs a £50,000 deposit plus £11,500 in stamp duty.
Limited company buy-to-let mortgages typically require a minimum deposit of 20% to 25%, giving a maximum loan-to-value of 75% to 80%. How that loan-to-value band feeds through to pricing is shown on our buy-to-let mortgage rate chart, which tracks two-year and five-year fixed averages against the base rate. A larger deposit generally opens access to more competitive rates and a wider choice of lenders. How far those rates sit from the market average, and when a 5% fee outweighs the lower headline, is set out in our guide to limited company buy-to-let mortgage rates for each fixed term. If you are looking at buy-to-let mortgages more broadly, the buy-to-let mortgage guide on the Mortgage One website covers the general principles of how these products work.
Stamp duty is the cost landlords most often underestimate. A company buying a residential property for £40,000 or more pays the higher rates, which add 5% to the standard bands on the whole price. On a £200,000 purchase that is £1,500 at the standard rates plus a £10,000 surcharge. Above £500,000 a company can face a 17% flat rate instead, unless a relief applies, such as the relief for property used in a property rental business. The stamp duty calculator on the Mortgage One website shows the figure for your price.
In practice the rent often limits the loan before the deposit does. If the rent will not support 75% of the price at the lender's stress test, the company needs a bigger deposit to make the numbers work, which is why the deposit and the rental assessment should be checked together before you commit to a purchase.
Limited company buy-to-let lenders and rental stress tests
Limited company buy-to-let lenders usually require the rent to cover 125% of the mortgage interest, stressed at the higher of 5.5% or the pay rate plus 2% on fixes shorter than five years. Higher-rate taxpayers borrowing personally often face 145%, so the same rent can support a larger loan through a company.
Lenders treat limited company buy-to-let applications differently from personal buy-to-let cases. A limited company mortgage for buy-to-let is assessed on the company structure, the rental income, the personal profile of the directors and the property itself, and the pool of lenders is narrower than for personal borrowing.
Published criteria show how close the specialist lenders sit. Keystone Property Finance tests limited company cases at 125% rental cover, at the pay rate on 5-year and 7-year fixes and at the higher of the pay rate plus 2% or 5.5% on shorter deals, and lends up to 80% LTV on loans up to £750,000 to experienced landlords. Fleet Mortgages bases every limited company standard product on 125% and lends up to 75% LTV on loans up to £1,000,000. Leeds Building Society accepts newly formed SPVs with property SIC codes and no minimum trading period.
Rental income coverage.
Lenders assess whether the expected rental income covers the mortgage payment by a specified margin. This is known as the interest coverage ratio or rental stress test. The Prudential Regulation Authority describes 125% as the industry standard minimum and expects lenders to assume an interest rate of at least 5.5% over the first five years, unless the rate is fixed for five years or more. That exception is why a five-year fix is often tested at a lower rate and can support a larger loan than a two-year fix on the same rent.
As an illustration, £1,000 a month of rent tested at 125% and 5.5% supports a loan of about £174,500. The same rent tested at 145% supports about £150,500. Testing the figures on the rental stress test calculator first shows how much loan a given rent supports at 125% and at 145%.
Personal guarantees and director profile.
Lenders typically require personal guarantees from the company directors. This means that although the mortgage is in the company's name, the directors are personally liable if the company defaults. Lenders will also assess the directors' personal credit history, income and experience as landlords. Some lenders require at least one director to have prior landlord experience, while others are open to first-time landlords purchasing through a company. Keystone Property Finance takes guarantees from the directors for 100% of the loan, and Fleet Mortgages asks every guarantor to take independent legal advice.
If your rent only just clears a lender's stress test, or your company has more than one shareholder, call 01202 155992 or contact Mortgage One.
Should you buy to let in your personal name or a limited company?
A limited company tends to suit higher-rate taxpayers, landlords building a portfolio and those leaving profit in the business, while personal ownership often suits a basic-rate taxpayer with one or two properties. From 6 April 2027 personal property income is taxed at 22%, 42% and 47%, which tilts more new purchases toward a company.
The choice between buying a buy-to-let personally or through a limited company comes down to a handful of practical differences:
· Tax on rental profit. Individuals pay income tax with relief on mortgage interest restricted to the basic rate. A company deducts the interest in full and pays corporation tax at 19% to 25% on what is left.
· Getting money out. Profit taken from a company as dividends is taxed again in your hands. A company suits landlords who can leave profit inside to fund the next deposit.
· Borrowing capacity. Company cases are commonly tested at 125% rental cover, where personal higher-rate cases are often tested at 145%.
· Cost and administration. A company files annual accounts and a confirmation statement and usually needs an accountant, and limited company products have historically been priced slightly above personal ones.
· Selling later. A property held personally is subject to capital gains tax on sale, while a company pays corporation tax on its gain and you then pay tax on any money you take out.
For a basic-rate landlord with one property and no plans to grow, personal ownership is often simpler. For a higher-rate landlord planning several purchases, the company route usually deserves a proper comparison. That comparison is a job for your accountant, and the mortgage side can then be shaped around the structure you choose. Either route now carries a £65 yearly fee per property on the new landlord database in England, so build it into the running costs you compare.
Can you transfer a buy-to-let into a limited company?
Yes, but moving a buy-to-let into a limited company is treated as a sale at market value. The company pays stamp duty with the 5% surcharge on that value, you may owe capital gains tax at 18% or 24%, and the company needs its own new mortgage, because a personal loan cannot simply be moved across.
If you already hold properties personally and are considering transferring them into a company, be aware that this is treated as a sale at market value. HMRC charges stamp duty on a transfer to a connected company on at least the market value, whatever price is actually paid, and capital gains tax treats a disposal to a connected person in the same way. You should take professional tax advice before proceeding with any transfer.
Incorporation relief can defer the capital gain where the lettings amount to a genuine business transferred as a going concern in exchange for shares. HMRC's guidance, following the Ramsay case, points to the degree of activity, and generally accepts a business where someone spends 20 hours or more a week on it. For transfers on or after 6 April 2026 the relief has to be claimed rather than applying automatically.
On the mortgage side, the personal loan is repaid and the company borrows afresh, so any early repayment charge on the existing deal is part of the cost. The new loan is assessed on the company's rental cover and the property's current value, which is why many landlords keep existing properties personally and buy new ones through the company. Some lenders will fund the transfer itself: Fleet Mortgages considers individuals selling properties to an SPV they own and classes the loan as a purchase.
Portfolio, expat and remortgage cases inside a property company
A company holding four or more mortgaged buy-to-lets, counted together with the directors' own, is a portfolio landlord case under Prudential Regulation Authority rules, so the lender reviews the whole portfolio rather than one property. Overseas directors narrow the lender choice, and a company loan nearing the end of its fix can be switched or remortgaged.
If you own four or more mortgaged buy-to-let properties, you are classified as a portfolio landlord under Prudential Regulation Authority rules. Portfolio landlord applications require additional information, including a schedule of all properties, rental income, outstanding mortgages and a business plan. The portfolio landlord mortgages page on the Mortgage One website explains how these rules work and what lenders require.
Landlords who are also UK expats or non-UK residents may face additional criteria when applying for a limited company buy-to-let mortgage. Some lenders restrict lending to companies with overseas directors or shareholders. Fleet Mortgages, for example, needs every director and shareholder on the loan to be UK resident with a full UK credit history. The expat limited company buy-to-let page covers how these cases are assessed and which lenders are more flexible on residency.
If you already hold limited company buy-to-let mortgages and your current deal is ending, it is worth reviewing whether to take a product transfer with your existing lender or remortgage to a new provider. The limited company buy-to-let remortgage page explains what lenders are changing and why this matters for existing borrowers.
To have the deposit, rental cover and company structure checked before you incorporate or apply, call 01202 155992 or contact Mortgage One.
The information provided in this article is for general guidance only and does not constitute personal or regulated financial advice. If you'd like to understand what these moves could mean for you, speak to Mortgage One. We can explain your options and timings based on your specific circumstances.
FAQs
1. Can a limited company get a buy-to-let mortgage? Yes. Many buy-to-let lenders lend to limited companies, usually a special purpose vehicle set up only to hold property. Some will consider a trading company with property activity, but the choice of lenders is narrower and the underwriting is more detailed.
2. Is it easier to get a buy-to-let mortgage through a limited company? It can be on the numbers. Many lenders assess company borrowing at 125% rental cover, where a higher-rate taxpayer borrowing personally is often tested at 145%, so the same rent supports a larger loan. The paperwork is heavier, with personal guarantees, company checks and director credit searches.
3. Should I put my buy-to-let properties in a limited company? It depends on your tax band, how many properties you plan to hold and whether you need to draw the income. New purchases are usually simpler to structure through a company than existing properties, because transferring a property triggers stamp duty and possibly capital gains tax. Take advice from an accountant before deciding.
4. Do limited companies pay stamp duty on buy-to-let? Yes. A company buying a residential property for £40,000 or more pays the higher rates, including the 5% surcharge on the whole price. Above £500,000 a 17% flat rate can apply, although relief is available where the property is let as part of a property rental business.
5. Are limited company buy-to-let mortgage rates higher than personal rates? Limited company rates have historically been slightly higher than personal buy-to-let rates, but the gap has narrowed as more lenders have entered this market. The difference varies by lender, deposit size and product type. A broker can compare current pricing across both routes.
6. Will I need to provide a personal guarantee? Yes, in most cases. Lenders require personal guarantees from the company's directors, which means you are personally liable for the mortgage debt if the company cannot meet its obligations.
7. Can I get a limited company buy-to-let mortgage as a first-time landlord? Yes. Some lenders accept first-time landlords purchasing through a limited company, although criteria may be slightly stricter than for experienced landlords. A broker can identify which lenders are most suitable for your situation.
8. How does a mortgage broker help with a limited company buy-to-let? A broker matches the company structure, the rent and the directors' circumstances to lenders whose criteria fit before an application is made. That avoids declines over SIC codes, shareholder layouts or stress tests, and Mortgage One can compare limited company products from across the whole of market.
9. Which lenders offer limited company buy-to-let mortgages? Most limited company lending comes from buy-to-let specialists and some building societies. Keystone Property Finance and Fleet Mortgages both test limited company cases at 125% rental cover, and Leeds Building Society accepts newly formed SPVs with no minimum trading period. A broker matches the company structure and rent to the lender whose criteria fit.