Why transforming your current residential property into a buy-to-let via an SPV could help you unlock your dream home

Moving house is never easy, no matter your circumstances.

Many sellers struggle to say goodbye to their homes; especially if you’ve spent countless hours and funds on renovations. And even if you’re 100% on board with selling away your home, you’ll have to deal with the stress of finding a reputable buyer, negotiating a price with them, and coordinating with them on moving day.

But what if you didn’t? What if you could purchase a new property without losing access to your current home?

Turns out, you can – by renting out your home to new tenants as a buy-to-let via your own SPV limited company.

Here’s how.

How does transferring your current home to an SPV work?

We’ve covered setting up an SPV in our definitive guide, so let’s skip straight to transferring your current property into the new limited company.

Put simply, your limited company purchases your home from you at market value; either by remortgaging or by setting up a loan agreement between you as a homeowner and the company.

You can then start using your old home to make money by letting it out to new tenants. Those rental profits can then be used to pay off the cost of the sale.

Meanwhile, the equity you’ve freed up by selling your home can be used as a deposit for purchasing your new home, as well as stamp duty and legal fees as long as you have enough equity to cover them. This means you can potentially secure the perfect home you’ve always dreamed of owning – without dipping into your cash resources.

What are the advantages?

Can you live in your old home while looking for tenants and your next home?

Likely not, since the limited company’s buy-to-let mortgage terms will likely specify that only tenants may live in the property. Some lenders may enable you to stay in the property until the end of the fixed rate term, but will need you to pay the remaining balance once this grace period is up.

Are capital gains tax and SDLT inevitable for property transfers?

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