Limited Company Buy-to-Let

What Is a Limited Company Buy-to-Let Mortgage?

A Limited Company Buy-to-Let (BTL) mortgage is a mortgage specifically designed for landlords who purchase rental properties through a limited company (LTD) rather than in their personal name.

This option has grown in popularity due to tax efficiency and flexibility, especially for landlords with multiple properties.

Who Can Benefit from a Limited Company Buy-to-Let Mortgage?

An LTD company BTL mortgage is suitable for:

• Landlords who own or plan to own multiple properties.
• Investors looking to minimise tax liabilities.
• Those who want to separate personal and business finances.
• Higher-rate taxpayers who want to reduce tax on rental income.

Why Purchase a Buy-to-Let Property as a Limited Company?

Buying rental properties through a limited company offers several advantages:

• Tax Efficiency – Instead of paying income tax on rental income (which could be up to 45%), a limited company pays corporation tax (currently 25% for most businesses).
• Mortgage Interest Relief – In a limited company, mortgage interest can be fully deducted as a business expense.
• Easier Portfolio Growth – Retained profits within the company can be reinvested into new property purchases.
• Limited Liability – Your personal finances are protected if anything goes wrong with the property investments.

However, there are additional costs, including higher mortgage rates, accounting fees, and administrative responsibilities.

How Does Tax Work on a Limited Company Buy-to-Let?

Taxation works differently for LTD company landlords compared to individual landlords:

• Corporation Tax – Limited companies pay corporation tax (currently 25%) on profits.
• Dividend Tax – If you withdraw money from the company as dividends, you may need to pay dividend tax.
• Stamp Duty Land Tax (SDLT) – Limited companies still pay the additional 3% SDLT surcharge on buy-to-let properties.
• No Capital Gains Tax Allowance – When selling, the company pays corporation tax on any profit, but personal capital gains tax allowances don’t apply.
• Proper tax planning is crucial, so we always recommend speaking to a tax advisor before proceeding.

How to Get a Buy-to-Let Mortgage Through a Limited Company

The process of securing a limited company BTL mortgage is slightly different from a personal BTL mortgage:

• Set Up a Limited Company – Most landlords use a Special Purpose Vehicle (SPV), a company created solely for property investment.
• Find a Lender – Not all mortgage lenders offer LTD company BTL mortgages, but we can help you find the best options.
• Provide Financial Information – Lenders may check personal income, business accounts, and rental projections.
• Put Down a Deposit – Most lenders require at least 25% deposit for LTD company buy-to-let mortgages.
• Legal & Tax Advice – Get professional advice to ensure a tax-efficient and legally sound setup.