A Buy to Let (BTL) Limited (Ltd) company mortgage is a mortgage which is secured and held against a property which is owned within a limited company.
How do Ltd company buy to let mortgages work?
Unlike personal Buy to Let mortgages, the mortgage is issued to the company instead of a person, enabling landlords to benefit from the tax efficiencies and asset protection provided by limited companies. At Avalon Mortgages, we’re able to give you personalised advice on Ltd company BLTs across Hemel Hempstead and Hertfordshire, but in the meantime, here’s our guide.
SPV mortgage structures
To acquire a Buy to Let limited company mortgage, you need to set up as a Special Purpose Vehicle (SPV). Fortunately, it’s not difficult. Once you've chosen your company name, you'll need to register your limited company with Companies House.
To do this, select one of the following Standard Industrial Classification (SIC) codes when setting up your new limited company:
- 68100: Buying & selling own real estate
- 68209: Other letting & operating of own or leased real estate
- 68320: Management of real estate on a fee or contract basis
This tells the Mortgage Lender that you are now set up as a SPV (Special Purpose Vehicle).
Limited company Buy to Let mortgages vs Personal Ownership
Check out our personal ownership and limited company mortgages comparison below.
- Ltd company Buy to Let mortgage
A limited company (typically an SPV) owns the property, paying corporation tax on profits at a lower rate than personal income tax. Companies can deduct mortgage interest and expenses, making it more tax-efficient. This structure is good for experienced landlords or larger portfolios, providing flexibility for reinvesting profits and inheritance tax planning.
- Personal ownership
Buying a buy-to-let property in your personal name means you're the legal owner, and rental income is taxed. Higher rate taxpayers may pay up to 45% on rental income and mortgage interest tax relief is restricted under personal ownership. You are personally responsible for any financial risks connected with the property.
Tax efficiency and common misconceptions
For many landlords, owning properties through a limited company provides significant tax advantages, particularly if they are in higher tax brackets or want to scale their portfolio. For instance, limited companies pay corporation tax on their profits, which is generally lower than personal income tax rates. However, a substantial number of landlords erroneously believe that limited company buy-to-let mortgages offer fewer tax benefits. In reality, many landlords could benefit from lower corporation tax rates compared with personal income tax rates.
How brokers compare limited company mortgage lenders
In addition to a network of limited company mortgage lenders our brokers have built up, they have access to a number of industry platforms. With technology at their fingertips plus an extensive network, our brokers are able to compare deals to find the most suitable buy to let Ltd company mortgages for you.
Next steps
Want tailored guidance on Ltd company BTL? Avalon Mortgages’ team is on hand to help, here in Hemel Hempstead. Get in touch for an initial discussion.
