🏢 Ltd Company Buy-to-Let
Why landlords are
going Ltd.
A government tax change reshaped property investment. Here's what it means, and whether a limited company structure is right for your portfolio.
80%
of new BTL mortgages now via Ltd companies
Source: Hamptons Research, 2024
19%
corporation tax vs up to 45% income tax
2017
when Section 24 changed everything
The Catalyst
Finance Act 2015 — Section 24 changed the rules.
Before 2017, landlords could deduct mortgage interest from rental income before calculating tax. Section 24 of the Finance Act 2015 phased out this relief for personal landlords. That's gone. Now higher-rate taxpayers are taxed on turnover, not profit.
Before 2017 — Personal
Rental income: £18,000
Mortgage interest: £10,000
Taxable profit: £8,000
Tax at 40%: £3,200
Net profit: £4,800
After 2017 — Personal
Rental income: £18,000
Taxable profit: £18,000 (no deduction)
Tax at 40%: £7,200
20% credit on interest: −£2,000
Tax bill: £5,200
Net profit: £2,800 ↓
💡 Finance Act 2015, Section 24 doesn't apply to limited companies — they still deduct mortgage interest in full
The Core Decision
Personal name vs
limited company
Personal Ownership
Mortgage interest restricted (Section 24)
Income taxed at 20%, 40% or 45%
Simpler setup, lower costs
Wider lender choice, lower rates
Capital gains taxed at 18%/24%
Can offset losses personally
Ltd Company SPV
Full mortgage interest deduction retained
Profits taxed at 19–25% corporation tax
Retain profits in company efficiently
Extract via salary + dividends
Easier to pass on as inheritance
Higher mortgage rates, more admin
The Structure
How an SPV works
Most lenders require a Special Purpose Vehicle — a limited company set up solely to hold property. SIC codes 68100 or 68209.
Director(s)
👤 You (Director)
Personal guarantee required
↓
🏢 Your Ltd Company SPV
SIC 68100 / 68209 · Owns the property · Pays corp tax
↙
🏠 Property
Asset of the company
↘
🏦 Lender
Charges mortgage on property
💡 You can be both the director and sole shareholder — setup via Companies House takes minutes
Affordability
What determines
borrowing capacity?
Ltd company BTL is assessed on rental income, not personal salary. Lenders apply an Interest Coverage Ratio stress test.
🏦 ICR — Standard
125% at 5.5% stress rate
Most Ltd company lenders
📊 ICR — Higher Rate
145% at 5.5% stress rate
Some lenders for higher LTV
💷 Max LTV
75–80% typical
Some lenders up to 85%
📋 Top-Up Income
Some lenders allow this
If rent doesn't cover stress test
🔄 Portfolio Landlords
Specialist assessment
4+ properties — full portfolio review
💡 Minimum rent example: £750/mo property → mortgage must not exceed ~£545/mo at stress rate
The Market
Who lends to Ltd companies?
High-street banks largely don't. The market is dominated by specialist and challenger lenders — and only accessible through brokers.
Paragon
Fleet Mortgages
Precise Mortgages
Aldermore
The Mortgage Works
Kent Reliance
Keystone
Landbay
Foundation Home Loans
Vida Homeloans
Shawbrook
Natwest (limited)
⚠️ Many specialist lenders are broker-only — you cannot apply direct. A broker with access to a comprehensive lender panel is essential.
Know Your Numbers
Costs to budget for
Ltd company BTL has extra layers of cost over personal ownership. Build these into your investment calculations from day one.
🏛️ Stamp Duty — 5% Surcharge
Applies to all BTL purchases
🏢 Company Setup (Companies House)
£12–£50
⚖️ Legal / Conveyancing
£1,500–£3,000
📊 Accountancy (annual)
£500–£2,000 per year
🏦 Mortgage Arrangement Fee
£0–£2,500
📈 Higher Mortgage Rate vs Personal
Typically 0.3–0.8% higher
💡 Does it still stack up?
For higher-rate taxpayers — usually yes
The Honest Answer
Is Ltd company BTL
right for you?
It's not the answer for everyone. The right structure depends on your tax position, portfolio size, and long-term goals.
A higher or additional rate taxpayer (40%+)
Building a long-term portfolio of 3+ properties
Happy to retain profits in the company
Planning to pass property on to family
Buying as a new landlord (not transferring existing)
A basic rate taxpayer (20%) — tax benefit is smaller
Moving an existing personal portfolio across (CGT + SDLT hit)
Only buying one property for the short term
Uncomfortable with annual accounts and admin
Needing income immediately (dividend admin applies)
Always take independent tax advice from an accountant before deciding — the numbers are personal to you
Step by Step
The application process
From company setup to keys — a Ltd BTL typically takes 6–10 weeks once you have a property agreed.
01
Set Up Ltd
Companies House, SIC 68100/68209
→
02
Speak to Broker
Specialist Ltd BTL search
→
03
AIP Issued
Company + personal checks
→
04
Property Agreed
Offer accepted
→
05
Full Application
Rental & personal assessment
→
06
Legal & Valuation
Solicitor + survey
→
07
Completion
Company owns property 🏢
⚠️ Directors will need to provide a personal guarantee — the lender has recourse to you personally if the company defaults
🏢
Completion
Your portfolio,
structured right.
The company owns the property. Rental income flows in, corporation tax is paid on profits, and you extract via salary or dividends — tax efficiently.
✓
Open a business bank account
✓
Register for corporation tax (HMRC)
📅 File annual accounts with Companies House and a corporation tax return with HMRC each year
The MakeMyMortgage Difference
Ltd BTL needs
a specialist broker.
🌐
Whole-of-Market Access
Most Ltd BTL lenders are broker-only. We access the full specialist market — rates and criteria you simply can't find going direct.
🎯
We Know Who'll Say Yes
Ltd BTL criteria varies wildly between lenders. We know which ones suit your company structure, property type and portfolio size.
🔍
Proactive Document Checks
We thoroughly review all your documents before they reach the lender — catching potential issues early and giving your application the best possible start.
📊
Portfolio Landlord Expertise
Growing a portfolio? We manage complex multi-property cases and know exactly how to present your financials to specialist lenders.
🛡️
Regulated, Expert Advice
Providing regulated advice and working entirely for you. We'll tell you honestly if the numbers don't stack up — not just take your case for a fee.
📋
End-to-End Support
From SPV setup guidance to completion, we handle the process and lender communication — you focus on finding the right property.
Get Started Today
Ready to invest through a limited company?
No obligation. We'll tell you if it's right for you before you commit to anything.
makemymortgage.co.uk →
Regulatory Information
Your Rights & Our Status
⚠️ Important Risk Warnings
Your home may be repossessed if you do not keep up repayments on your mortgage.
Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority.
🏛️ Our Regulatory Status
MakeMyMortgage is an Appointed Representative of PRIMIS Mortgage Network, a trading name of Personal Touch Financial Services Ltd. Personal Touch Financial Services Ltd is authorised and regulated by the Financial Conduct Authority.
💷 Fee Information
Our typical fee is £299 but this can vary depending on the complexity of your mortgage needs. Our fee will be discussed and agreed with you before any work begins.
📞 Contact Us
MakeMyMortgage · makemymortgage.co.uk · This guide is for information purposes only and does not constitute personal mortgage advice. Information was correct at time of publication and is subject to change.
We offer mortgage advice based on a comprehensive panel of lenders representative of the whole of the market. We do not offer advice across all available products from all lenders. Personalised mortgage advice is available on request. The guidance contained within this document is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.