More and more landlords are buying rental property through a limited company rather than in their own name. If you’re weighing up the two routes, here’s what actually matters.
What Is a Limited Company Buy to Let Mortgage?
A limited company buy to let mortgage lets you purchase or remortgage a rental property through a company structure, usually a Special Purpose Vehicle (SPV) set up specifically to hold property. Rather than the mortgage and rental income sitting under your own name, they sit under the company’s.
It’s a route that’s grown in popularity since changes to mortgage interest tax relief made personal ownership less attractive for many landlords, particularly those in the higher tax brackets.
The Case For Using a Limited Company
Tax treatment. Company profits are taxed at corporation tax rates, which sit well below the 40–45% higher and additional rates of personal income tax. On top of that, companies can still deduct mortgage interest as a business expense in full, a relief that’s been steadily restricted for individual landlords.
Liability sits with the company. Your personal assets: your home, your savings are legally separate from the business. If something goes badly wrong with the rental portfolio, that separation offers real protection.
More control over how you’re paid. Directors can draw income as salary, dividends, or a mix of both, giving more scope to plan around personal tax thresholds year to year.
Easier to scale. Profits can be left in the company and reinvested into the next property, rather than being drawn out (and taxed) every year. Useful if the goal is to keep building the portfolio rather than live off the income now.
Simpler succession. Passing on shares in a company is often more straightforward than transferring the deeds to a property, which can make estate and inheritance planning easier to manage.
Cleaner bookkeeping. Business and personal finances stay separate by default, which tends to make accounting, budgeting, and tax reporting less messy.
The Case Against
Mortgage costs. Limited company buy to let mortgages typically carry higher interest rates than standard personal buy to let deals, and the pool of lenders offering them is smaller.
More to manage. Annual accounts, a company tax return, and ongoing compliance with HMRC and Companies House all come with running a limited company, none of which applies if you hold property personally.
Extra cost. Most landlords running a company will want an accountant, and there are setup costs to factor in too, so the admin savings elsewhere need to outweigh this.
Fewer lenders to choose from. Not every buy to let lender deals with limited companies, which can mean more legwork or a broker to find a competitive deal.
Less privacy. Company accounts are filed publicly with Companies House, so your financial details aren’t as private as they would be under personal ownership.
So, Is It Worth It?
There’s no single right answer, it depends on your circumstances:
- Higher-rate taxpayers often come out ahead, since the tax savings can be significant.
- Landlords building a larger portfolio benefit from being able to reinvest profits without drawing them down each year.
- Anyone concerned about personal liability gets a meaningful layer of protection.
On the other hand, if you’re a first-time landlord with one or two properties, the extra admin and cost of running a company may not be worth it, the numbers often only stack up once a portfolio reaches a certain size.
The right move depends on your income, your growth plans, and your appetite for admin, which is exactly the kind of thing worth talking through with a specialist before you commit either way.
Why Use a Broker for a Limited Company Buy to Let Mortgage?
Limited company buy-to-let is a more specialist corner of the mortgage market, and a broker earns their keep here:
- Access: some lenders in this space only deal through brokers, not directly with borrowers.
- Lender knowledge: knowing which lenders actually accept SPVs, and on what terms, saves a lot of dead ends.
- Time saved: a broker handles the paperwork and the back-and-forth with lenders.
- Matched advice: recommendations based on your specific goals, not a generic product list.
- Fewer costly mistakes: the wrong structure or lender choice can be expensive to unwind later.
Talk to Munro Mortgages
Deciding whether to buy through a limited company is as much a tax question as a mortgage one. Get advice from both an accountant and a specialist broker before you commit.
Get in touch with the team at Munro Mortgages for a no obligation chat about whether a limited company structure makes sense for your buy to let plans.
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