Do you want an effective, efficient way to grow your property portfolio? At SPV Mortgages, we can help you with a limited company buy-to-let mortgage service! Contact the expert team at SPV Mortgages today to find out more about how we can help you!

How Does a Buy-to-Let Limited Company Work?

You can utilise the services of a buy-to-let limited company to buy a property and take out a loan through said company rather than in your name. While this does mean that the company will be the legal owner of the property, it’s an excellent solution for anyone looking to keep their personal and business portfolios separate and limit an individual’s personal liability if financial issues arise.

The Key Features and Benefits

If you’re considering going through an SPV like SPV Mortgages for your limited company buy-to-let mortgage, it’s important to remember the benefits of this method. As a team, we have come together to highlight some of these very benefits, including:

Better Taxation

Holding property in a limited company can offer many different tax benefits. Higher-rate taxpayers or those who plan to own several properties will absolutely see significant tax savings. This is because the mortgage itself is not in your name; therefore, the rental income is not added to your other earnings and not taxed as income tax.

More Flexibility

With your name not being personally attached to your buy-to-let mortgage, you have much more freedom in how you choose to use your profit; in fact, the door opens to a whole range of options for you. Whether you want to invest in more properties, increase your pension, or help your personal tax planning, it’s impossible to deny the feeling of freedom you gain using limited companies’ buy-to-let mortgages.

Portfolio Growth

If one of your main goals is expanding your property portfolio, you’ll find that using a limited company means you can retain your profits within the company to fund more purchases later down the line. By retaining earnings within the company, you’re also protecting them from tax liabilities which allows you to repay debt and increase your property portfolio at a much faster rate than you’d be able to alone. For more information on how a limited company mortgage can help with your portfolio growth, have a chat with the team at SPV Mortgages today!

Who is Eligible?

Different lenders have their own eligibility criteria to meet in order to secure limited company mortgages, however, we can highlight some of the more common qualifying factors a lot of lenders will look for, including:

• A company set up solely for buying, letting, and selling has been set up, or will be set up.
• The company must be registered in England, Wales, or Scotland and match any records with companies house.
• A limit on the number directors or shareholders involved in the purchase. Each lender is different with this limit, with some having as little as two while others can allow many more.
• Typically, all shareholders should be directors with 100% shareholding in the company between them.
• An in depth analysis of profit will be carried out on directors, which also take into account any future predictions too.

Get in touch today for more information about the eligibility criteria of getting a buy-to-let limited company mortgage! We’re happy to guide you through the process and assist you where you need!

How Do I Know If a Limited Company Buy to Let Mortgage is Right For Me?

Whether or not you’re eligible, it’s important to consider whether or not a limited company mortgage is right for you. To do this, we have put together some important considerations that could make all the difference in helping you decide whether a limited company mortgage is the way you want to go to secure property for your portfolio:

No Capital Gains Tax Allowance

When purchasing a company through a limited company, neither the company nor the individual will receive a capital gains tax allowance. Instead, you’ll pay corporation tax on your buy-to-let property when it is taken through a limited company. This can vary depending on the individual and company, but corporation tax could be much cheaper – it depends largely on the trading company’s finances. At SPV Mortgages, we can provide you with a range of mortgage services and professional tax advice when choosing a limited company mortgage.

New Costs To Factor In

To set up a limited company to purchase a mortgage, there are a few costs to consider that wouldn’t apply if you were to go through traditional methods like using a mortgage broker. Firstly, you’ll legally have to prepare accounts, pay corporation tax on the company, file at Companies House, pay any legal fees associated with setting up the company, undertake annual auditing of finances if applicable, and work with accountants who may charge a higher fee to prepare information for Companies House.

Higher Mortgage Rates

Due to the narrower buy-to-let market for limited company mortgages than that of individuals or private landlords looking to boost their portfolio, you may find that initially, the cost of your mortgage will be higher than that of other options. However, it’s important to recognise factors like mortgage interest that will be the responsibility of the limited company and the support a limited company can offer you with buy-to-let properties.

For info about a limited company buy-to-let mortgage, get in touch with SPV Mortgages today!

To find out more, or to chat with the experts at SPV Mortgages, get in touch with our team today! We’re here to advise you on your future investments, and we can help with a wide range of topics. Want to know what else we offer? We can clarify how you pay stamp duty with our stamp duty calculator, and you can explore our buy-to-let calculator too! Get in touch now!

Frequently Asked Questions

How Does A Limited Company Mortgage Work?

Limited company mortgages are an excellent way to boost your property portfolio, landlords often opt to go through a limited company as they work by setting up a mortgage via trading companies.

Is it Difficult to Get a Mortgage on a Limited Company?

There is a degree of difficulty in terms of finding a property that will accept a limited company mortgage. While the market is much wider than it used to be, it is still small when compared to individual mortgages.

How Much Deposit do I Need for a Buy-to-Let Ltd Company?

Like an individual or commercial mortgage, the cost of the deposit can vary depending on the cost of the property itself. Typically, you’d require a 20-25% deposit but some mortgage lenders may ask for more.

How Many Buy-to-Let Mortgages can a Limited Company Have?

There is no restriction legally on how many mortgages on properties a limited company can have, but some lenders may limit your overall borrowing figure.

What Income Must a Limited Company Show to Get a Buy-TO-Let Mortgage?

Lenders won’t typically look at the company itself, but rather the income of directors to determine whether or not a mortgage is affordable, and it will typically be a combined total of all directors rather than just one person.