A Complete Guide To Limited Company Buy-To-Let Mortgages.

Did you know that 66,587 buy-to-let (BTL) companies were set up in 2025 alone, showing an 8% rise compared to 2024? This trend is set to continue in 2026, too, with limited company buy-to-let mortgages thriving in the UK property market.

A large chunk of buy-to-let purchases today is made through limited companies. This is because of the Section 24 tax changes that significantly reduced the profit margins of high-rate landlords who held properties in their names.

In this guide, we will understand the basics of limited company BTL mortgages and explore their eligibility criteria, costs, tax implications, and setup procedures.

What is a limited company buy-to-let mortgage?

A limited company buy-to-let is a mortgage arrangement where a landlord invests in a rental property through a limited company. They do not buy the property in their own name. If you take this mortgage as an company in which you own shares will own the property.

Most BTL mortgage lenders in the UK require businesses to be set up as Special Purpose Vehicles (SPVs). SPV is a company created specifically for holding and managing properties. This is why such a mortgage is also called an SPV BTL mortgage.

Dealing with an SPV makes underwriting simpler. A general trading company involves analysing complex balance sheets and various business risks. SPVs involve transparent activities that are limited to the company making investments.

If you want to get a limited company BTL mortgage, your company should be registered with these Standard Industrial Classification (SIC) codes:

• 68100: For buying and selling your own real estate
• 68209: For letting and operating your own or leased real estate.
• 68320: For real estate management on a contract or fee basis.

You can still get a limited company BTL mortgage through a general trading company. However, your lender options will be limited, and the interest rates will be higher.

Limited company BTL vs. personal name BTL

While a limited company BTL has a company owning a rental property, a personal name BTL has an individual owner.

The table below shows major differences between the two arrangements:

Why use a limited company for buy-to-let?

While the biggest motivator behind getting a limited company BTL mortgage is tax benefits, there is more to this.

Here are the biggest reasons why landlords use limited companies for BTL mortgages:

Tax efficiency

Limited companies in the UK are not subject to Section 24 of the Finance Act 2015. A company can treat the mortgage interest as a fully deductible business expense. On the other hand, an individual landlord can only claim 20% tax credit on the interest.

Portfolio building

As profits stay within your company, it only needs to pay Corporation Tax (around 19% to 25% in 2026). The company can use the remaining profit to make diverse investments and build a healthy portfolio.

Inheritance tax planning

Limited company BTL mortgages give entrepreneurs enough flexibility to pass on their shares through inheritance. All these activities, with correct legal advice and tax advice, can help you with effective inheritance tax planning.

Limited liability protection

Being a separate legal entity, your company holds the debt. If the property business fails, your personal assets remain safe. However, most BTL lenders in the UK ask for a Personal Guarantee (PG), making you indirectly liable for your debts.

Major drawbacks of limited company BTL mortgages

You should know these limited company BTL drawbacks before making a final decision:

High rates

Limited company buy-to-let mortgage rates are higher than standard mortgage rates. Expect to pay a premium of 0.25% to 0.75% on the interest rate.

Operational costs

This mortgage will bring additional operational costs for your company. It is best to set aside £500 to £1,500 every year for expenses like filing annual accounts, corporation tax returns, confirmation statements, and more.

Double taxation

While the profit remains in your company, extracting it for yourself is expensive. You will need to pay corporation tax on the profit, followed by an additional dividend tax (10.75% for basic rate and 35.75% for a higher rate) when you pay yourself.

The stamp duty trap

Many corporate landlords overlook this challenge. When you move a property you already own into your company, it counts as a sale. You will need to pay stamp duty (at the additional 5% surcharge) and capital gains tax for the transfer.

Who should and shouldn't use a limited company BTL mortgage?

Here is who should use a limited company BTL mortgage:

• Income taxpayers at higher or additional rates
• Landlords planning to build a portfolio of two or more properties
• Long-term landlords who do not need personal rental income as of now
• Investors who want to retain the rental income for reinvestment
• People keen on inheritance tax planning

On the other hand, a limited company BTL is not the best option for:

• Single-property landlords
• Basic-rate taxpayers with low rental income
• Landlords who need immediate and personal rental income
• Short-term property holders (the mortgage will get too expensive)

Eligibility and lending criteria for limited company BTL mortgages

Getting an SPV BTL mortgage will require you to meet the following eligibility and lending criteria:

• Maximum LTV: A cap at 75% to 80%.
• Rental cover ratio: 125% to 145% at stress rate (implying that the rental income should be 125%-145% of the mortgage interest).
• Director's income: £25,000+ in personal income of at least one Director (outside of the rental income).
• New SPVs: Many lenders approve applications of brand-new SPVs, provided they have the right SIC codes. It is a common misconception that a company must have traded for 12+ months.
• Minimum property value: £75,000 (it can differ based on your circumstances and the lender you choose).

Limited company BTL costs and stamp duty

Limited companies get no exemptions when it comes to the stamp duty surcharge. They need to pay the full 5% additional dwelling surcharge.

Moreover, you may need to pay 15% SDLT (stamp duty land tax) for purchases above £500,000. We recommend verifying these values before finalising a property deal.

Here are the additional costs associated with a limited company buy-to-let apart from the stamp duty:

• Mortgage product fees: 1% to 2% of the loan
• Valuation and legal fees
• Accountancy setup: £200 to £500
• Annual accountancy: £500 to £1,500
• Companies House filing fees: £50 per year

Step-by-step limited company BTL mortgage process

From making an application to mortgage completion, getting a limited company mortgage typically takes 6 to 10 weeks.

Here are the major steps involved:

1. Speak to an tax accountant and confirm if a limited company BTL suits your tax situation.
2. Set up an SPV using the right SIC codes (you can do it online for £12 to £50).
3. Open a business bank account.
4. Consult a reputable and whole-of-market mortgage broker.
5. Find a suitable lender.
6. Prepare a Decision in Principle.
7. Get your property valued by the lender's surveyor.
8. Make a complete mortgage application.
9. Share personal guarantee signed by all directors
10. Receive and accept your mortgage offer.
11. Arrange for conveyancing.
12. The funds are finally released to complete the purchase.

Tax implications for a limited company buy-to-let mortgage

Your exact tax implications will depend on your individual circumstances. Always consult a qualified tax adviser before going ahead.

Here are the rules that commonly apply when it comes to SPV BTL taxation:

• Corporation tax: 19% on profits under £50,000; 25% for profits over £250,000.
• Interest deductibility: 100% deductible as business expenses.
• Dividend tax: 10.75% for basic-rate taxpayers; 35.75% for higher-rate taxpayers (after £500 allowance).

Your next step

Most lenders require their clients to have dedicated brokers. At MariannaFS, independent limited company BTL brokers will help you find suitable lenders who favour SPV BLTs and offer deals that meet your requirements.

Our experience with many specialist lenders like TMW, BM Solution, Coventry BS, Aldermore, and more has allowed us to help several landlords make informed and profitable investments.

Call us on 02080902043 or send us a WhatsApp message for a free limited company BTL mortgage comparison call.

Frequently asked questions

Can I move my existing property into a limited company?

Yes, but this move will be considered a sale and purchase. You will need to pay stamp duty and capital gains tax on it.

Is getting a limited company BTL mortgage harder than a standard mortgage?

The documentation for a limited company BTL mortgage is more extensive, and you will need a separate SPV account, making the process a bit more elaborate. However, mortgage brokers with relevant expertise will help you at every stage of your journey.

What are SIC codes?

SIC (Standard Industrial Classification) codes are the codes that inform your lender and Companies House about your company's nature.

Do I need a larger deposit for a limited company BTL?

Yes, you will typically need a 25% deposit for a limited company BTL, which is higher than a standard residential mortgage.