Limited company buy-to-let (also known as SPV BTL) has become one of the most popular ways for landlords to buy and hold rental property. Many investors now use a Special Purpose Vehicle (SPV) limited company rather than owning property personally.
This guide explains how limited company BTL works, the tax benefits, lender criteria, stress testing, deposit requirements, rates, and whether purchasing through a company may be better for your long-term strategy.
What Is a Limited Company Buy-to-Let?
A limited company BTL is when you purchase a rental property through a company rather than in your personal name. Most landlords use an SPV — a simple company created solely to hold property.
Key features:
- ✔️ Property owned by a company (not personally)
- ✔️ Corporation tax on profits (instead of income tax)
- ✔️ Interest can be offset as a business expense
- ✔️ Access to specialist BTL lenders
- ✔️ Often better for higher-rate taxpayers
What Is an SPV Limited Company?
An SPV (Special Purpose Vehicle) is a limited company created purely to buy, hold and rent property. Lenders prefer SPVs because they are simple, predictable and easier to underwrite.
Typical SIC codes:
- ✔️ 68100 – Buying and selling of own real estate
- ✔️ 68209 – Other letting and operating of own or leased real estate
Who Uses Limited Company Buy-to-Let?
Limited company BTL is commonly used by:
- ✔️ Higher-rate taxpayers
- ✔️ Portfolio landlords
- ✔️ Investors expanding quickly
- ✔️ Landlords using mortgages heavily
- ✔️ People planning long-term rental portfolios
Benefits of Limited Company Buy-to-Let
1. Mortgage interest is fully deductible
Unlike personal ownership (where interest relief is restricted), companies can offset mortgage interest as a business expense.
2. Corporation tax can be lower than personal tax
Rental profits inside a company are taxed at corporation tax rates, which may be more efficient than income tax for higher-rate individuals.
3. Easier to scale and build a portfolio
SPVs can make refinancing and borrowing easier for portfolio expansion.
4. Potential inheritance tax planning advantages
Shares can be transferred in stages — often easier than transferring part of a personally owned property.
Downsides of Limited Company Buy-to-Let
- ❌ Higher mortgage rates compared to personal BTL
- ❌ Lender fees can be higher
- ❌ Running costs (accounts, filings, bookkeeping)
- ❌ More legal and tax structure to manage
LTV Requirements for Limited Company BTL
Most lenders offer:
- ✔️ Up to 75% LTV (most common)
- ✔️ 80% LTV with specialist lenders for strong cases
To understand LTV in more detail, see: LTV Explained
Stress Testing for Limited Company BTL
Limited company BTL uses a different type of affordability assessment. Instead of income-based checks, lenders use rental-based stress tests.
They assess:
- ✔️ Expected rental income
- ✔️ Interest cover ratio (ICR)
- ✔️ A stressed interest rate (often 6.5%–8%)
For a deeper breakdown of this, see our dedicated guide: BTL Stress Testing
Rates for Limited Company BTL
Rates are generally higher than personal BTL mortgages because lenders consider company borrowing slightly higher risk.
Despite this, many landlords still choose SPVs due to tax treatment and long-term profitability.
Deposit Requirements
Most limited company BTL mortgages require:
- ✔️ 25% minimum deposit (75% LTV)
- ✔️ 40% deposit for best rates
If your deposit level is tight, see our guide on deposits: Mortgage Deposit Requirements
Example: How Limited Company BTL Works
Scenario:
- Purchase price: £300,000
- Deposit: £75,000 (25%)
- Mortgage: £225,000
- Expected rent: £1,450 per month
If the ICR (Interest Cover Ratio) is met at the lender’s stressed rate, the mortgage is approved.
Tax comparison (simplified):
- Personal ownership: tax on rental profit at 20%–45%, limited interest relief
- Company ownership: corporation tax on profit, full interest deductibility
For many higher-rate taxpayers, company structures may provide long-term net savings.
Ownership & Directors
Lenders usually require:
- ✔️ All shareholders to be directors
- ✔️ Personal guarantees from directors
- ✔️ SPV must use the correct SIC codes
Portfolio Landlords
If you own four or more mortgaged properties, most lenders will treat you as a portfolio landlord. They may require:
- ✔️ Full asset & liability schedule
- ✔️ Rent roll spreadsheet
- ✔️ Business plan (sometimes)
Using Equity from Personal Property for an SPV Purchase
Many landlords remortgage their home to release equity, then use the funds as a deposit for an SPV BTL purchase.
If you’re exploring this, see our: Remortgage for Home Improvements (similar borrowing principles).
Limited Company BTL for New Builds & Flats
Lenders are more cautious with new builds and high-rise flats. Criteria vary, but expect higher stress tests and stricter underwriting.
When Limited Company BTL Is NOT Suitable
- ❌ Low-rate taxpayers (no major tax advantage)
- ❌ Small, one-off landlords
- ❌ Borrowers wanting lowest interest rate possible
- ❌ Properties with lower rental yields
Next Steps
If you’re considering limited company buy-to-let and want clarity on tax, structure, LTV, stress testing or purchase strategy, we can connect you with FCA-regulated BTL specialists who handle SPV applications every day.
You can also explore related guides such as BTL Stress Testing or estimate borrowing using our mortgage calculators.
All mortgage advice is provided by FCA-regulated advisers. Your home may be repossessed if you do not keep up repayments on your mortgage.
FAQs
Do limited company BTL mortgages have higher rates?
Yes — typically slightly higher than personal BTL due to perceived risk.
Do lenders require personal guarantees?
Almost always — directors personally guarantee the mortgage.
Can an SPV buy multiple properties?
Yes — that’s exactly what they’re designed for.
Can I transfer a personally owned BTL into a company?
Possible, but may trigger stamp duty and capital gains tax — specialist advice needed.
Is a company always better?
No — it depends on tax rate, future plans, and portfolio size.