Buy-to-Let Through a Limited Company: Pros, Cons & Tax Benefits

Holding buy-to-let property in a limited company (often called an SPV — Special Purpose Vehicle) can be significantly more tax-efficient than personal ownership. Corporation tax is 25%, versus up to 45% income tax for higher-rate taxpayers. Plus, you can deduct full mortgage interest as a business expense, which personal landlords lost under Section 24.

When Does a Limited Company Make Sense?

It’s most beneficial for higher-rate taxpayers, landlords building a portfolio, and those buying new properties (transferring existing properties incurs stamp duty and capital gains tax). Use our buy-to-let tax calculator to compare personal vs company ownership for your specific situation.

The Downsides to Know About

Limited company mortgages often carry higher interest rates (0.5-1% more). You’ll need annual accounts filed at Companies House, a corporation tax return, and potentially an accountant. Extracting profits as dividends triggers additional personal tax. Our landlord tax deductions guide explains how deductions work differently for company-owned properties.

Getting Started with an SPV

Set up a limited company with the right SIC code (68209 for property letting), open a business bank account, and find a broker who specialises in limited company buy-to-let mortgages. Read our Making Tax Digital guide to understand the reporting requirements, and check the stamp duty calculator before purchasing.

Full guide coming soon.