Limited Company
Mortgages
We are experienced in all types of Limited Company Buy to Let, whether Portfolio Landlords to First Time Landlords, large or small, own name or via a Limited Company, or where there is a Trust involved.
Contact UsA limited company mortgage means you can buy a property in the name of a company rather than your own name. You will need to be Director of that Limited Company, on your own or jointly with up to four Directors. The Limited Company will be the owner of the property, rather than you as an individual.
Contact one of our experienced Limited Company Mortgage Brokers and discuss your Buy to Let Limited Company mortgage lending requirements.
- Call for the latest limited company mortgage rates and our 5 star customer service
- £0, No Broker fees typically for our Mortgage Advice
- Talk to an experienced Buy to Let Mortgage Adviser 8am-8pm Mon-Thursday, Friday 8am-5pm
Contact us for a free, no obligation conversation on how we can help you.
Why should you choose Vincent Burch as your Limited Company mortgage broker?
Operating a buy-to-let as a limited company has increased in popularity since 2017 when the Government began reducing tax relief for individual property investors. Limited company landlords are able to claim 100% mortgage interest relief and also benefit from the lower rates of Corporation Tax paid on profits compared to Income Tax paid on earnings generated from rental income.
Our clients rate our expertise, with 98% of them recommending our services.
Whether you are a first-time landlord, or an experienced property investor, our typically no-fee* service means you have nothing to lose by submitting an enquiry.
Being ‘whole of market’ means we can offer you a variety of buy-to-let mortgage rates. 100+ lenders, offering 1000s of mortgage products. All with a selection of options available to limited companies operating as SPVs or trading companies.
Lender products are updated regularly so please contact us for the latest offers available.
Can a Limited Company Take Out a Mortgage?
Yes, however the company must be set-up as one of the following:
- Special Payment Vehicle (SPV) – a company created for a specific purpose, in this instance for the purchase and management of Buy to Let properties.
- Trading Company – typically an existing company looking to invest in a Buy to Let property to add to a current portfolio of assets.
If you’re thinking of incorporating an existing Buy to Let property into a new limited company, we recommend you speak to an experienced tax adviser before making any decisions. Our partners at GetGround are offering all Vincent Burch clients and enquiries a free consultation – find out more here.
More Mortgage Choice: SPV Mortgages
Our independent team of brokers at Vincent Burch Mortgage Services have access to the best limited company mortgage rates on the market, from a range of specialist lenders. We have experience in finding buy-to-let limited company mortgages for SPV and trading companies as well as private individuals seeking to transfer an existing rental property into a limited company set-up.
Are Limited Company Mortgages Right For You?
The rental market has become increasingly challenging over recent years, particularly for private landlords. Rising buy-to-let mortgage costs, dwindling tax relief and tightening regulations have left many wondering how to successfully adapt to this new environment.
Although rental demand remains high, the impact of falling house prices, higher costs and changes to Capital Gains Tax (CGT) means the only answer for some landlords is to sell up and leave the market. For others, the solution may be to set up a limited company, an option that has grown in popularity over recent years. According to estate agent Hamptons, the number of landlords operating as limited companies has doubled since 2017 – there are now 300,000 property companies in the UK, up from 89,757 in 2017. We estimate that 90%/most of all buy-to-let applications we receive are now from limited companies.
This increase, driven mainly by fiscal and regulatory pressures, also reflects the Government’s desire for the buy to let market to become professional. Managing a rental portfolio as a limited company may help some landlords to achieve this.
Pros and cons of becoming a limited company landlord
It’s important to research and understand the factors involved in setting up a limited company before making a final decision. Here, we look at some of the main points to consider.
- Tax – limited companies do not pay Income Tax on rental income, instead they’re charged a fixed rate of Corporation Tax on rental profits up to 25% depending on the size of turnover (from April 2023). This is particularly beneficial for higher-rate taxpayers or those with larger portfolios.
- Mortgage interest relief – unlike private landlords who can no longer claim mortgage interest relief, a limited company buy to let business can deduct 100% mortgage interest from rental incomes as it’s considered a business expense.
- Liability – if something goes wrong, your liability is limited to the value of your financial investment in the business. You can further mitigate this risk by taking out professional indemnity and personal liability insurance.
- Admin and costs – a company set-up will incur additional costs and associated paperwork such as preparing accounts, filing at Companies House and legal fees.
- Access to profits – because a limited company is a legal entity in its own right (with the assets and profits belonging to the company), profits have to be withdrawn as a salary and/or dividends and records need to be kept of all these transactions.
- Future planning – if you plan to transfer ownership to a family member at a later date, then it could be simpler and more tax-efficient to do this through a limited company. As the property isn’t changing ownership (it’s still owned by the company) it could protect the transaction from Stamp Duty, Inheritance Tax and CGT.
- Limited company buy-to-let mortgages – most lenders charge slightly higher interest rates and arrangement fees for limited company buy-to-let mortgages. To find the best finance for your portfolio, speak to a specialist independent buy-to-let mortgage broker who offers expert, impartial advice.
As you can see, there are many factors to consider, so seeking financial and legal advice is essential before making your decision. But whether you choose to operate as a limited company or private landlord, those who can ride the wave of rising costs, comply with increasing regulations and work to professional standards, will be in a strong position to take advantage of the continued demand for high-quality rental properties in the future.
Suitability for your situation
Deciding on if a limited company mortgage is right for you depends on various factors, such as if you plan to build a substantial property portfolio and retain profits within the company for reinvestment, the tax benefits may outweigh the complexities and cost. Higher rate tax payers may find the tax efficiencies particularly beneficial, as the corporation tax rate is lower than higher personal income tax rates.
You should also be prepared to handle the increased administrative responsibilities or incur additional costs by hiring professionals to manage the company’s finances and compliance requirements.
If you’re thinking about setting up a limited company structure to manage your property portfolio, speak to our experienced advisers at Vincent Burch Mortgage Services. We can advise you on the best finance options available and discuss the implications for your investment now and in the future. Our whole-of-market approach means we have access to lenders who are not on the high street, offering bespoke limited company buy-to-let mortgages at competitive rates.
Does a Ltd Company Pay Stamp Duty?
If you purchase a residential dwelling, then usual stamp duty is payable in the same way as if you purchased in your own name. If the property is the first property that the Company owns, it is still usually treated as under second residential property for Stamp Duty purposes. However, if you purchase a commercial or mixed-use property then stamp duty is not payable.
Can a Limited Company Buy a House to Let?
Yes, a limited company can purchase buy-to-let property – the mortgage can be either full capital & repayment, or interest only. Interest only is most people’s preferred option for buy to let mortgages, which means you only have to pay the interest amount each month. However, just paying the interest only amount means you are not paying back the mortgage balance at the end of the term.
Why Buy a House Through a Limited Company?
The main reason for purchasing a property via a limited company is due to tax efficiency. As a higher-rate taxpayer letting a property as a private individual, you pay as much as 45% tax on your rental income, and you cannot offset the mortgage costs against the rental income for tax purposes in your own name.
Please ensure you speak with an accountant who is qualified to give you tax advice, for your circumstance.
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