Limited Company Buy to Let Mortgages
The Rise of Limited Company Buy to Let Mortgages
Limited Company buy to let mortgages have become an increasingly popular choice for
property investors in recent years. This financial arrangement involves purchasing and
managing rental properties through a limited company, as opposed to owning them as an
Tax Advantages of Limited Company Buy to Let Mortgages
Limited companies may benefit from more favourable tax treatment compared to individual landlords. This can include lower rates of taxation on rental income and capital gains.
Interest on mortgage payments may still be fully deductible for limited companies, while individual landlords may face restrictions on mortgage interest deductibility.
Unlocking Opportunities with Keys Mortgages
Keys Mortgages has the expertise to help you navigate the complexities of limited company buy to let arrangements. We have access to a growing network of lenders, including those offering specialised products for limited companies.
Partner with Keys Mortgages to Realise Your Property Investment Ambitions
With our guidance and expertise, navigating the complexities of limited company buy to let arrangements becomes seamless, allowing you to maximise the potential of your property investments within a limited company framework.
Limited Company Buy to Let Mortgage FAQs
A Limited Company Buy to Let Mortgage is a financing arrangement where rental properties are owned and managed through a limited company rather than as an individual landlord. The limited company acts as the legal entity responsible for the properties.
Limited companies can benefit from more favourable tax treatment, including potentially lower rates of taxation on rental income and capital gains. Interest on mortgage payments may also be fully deductible, which can result in significant tax savings compared to individual ownership.
While there are many advantages, there are also considerations such as administrative overheads, setup costs, and potentially, slightly higher mortgage rates. Additionally, limited companies involve additional compliance requirements and reporting.
Lenders assess the directors and/or shareholders in the same way as a BTL being purchased by an individual as the lender is still lending to the directors and/or shareholders, not the company.
Setting up a limited company involves registering it with Companies House, appointing directors and completing the necessary legal paperwork. It’s advisable to consult with an accountant and mortgage adviser for guidance on structuring the company.
The company should be a Sole Purpose Vehicle (SPV) solely for the use of renting or selling property.
The Standard Industry Classification (SIC) code should be as follows: ‐
68209 Other letting and operating of own or leased real estate – this is typically used for property rentals
68100 Buying and selling of own real estate – this is typically used for
trading (buying and selling)
Many lenders require this SIC code to be showing on Companies House records at the time of the application.
Lenders are happy to lend to new companies; you do not need to have existing company accounts.
This document needs to be signed in front of a solicitor that is independent of the one acting for the limited company. It can be a different partner at the same firm of solicitors, however some lenders and solicitors do not allow this, so it is worth checking beforehand. Some solicitors will simply include it in their overall cost of dealing with a limited company, but you may need to find a separate solicitor and pay them accordingly.
The cost for this extra‐legal work varies hugely from £100 to around £500.