Limited Company Buy to Let Mortgages: Tax, Lenders and How SPVs Work (2026)

By Jake Stott, Knox Mortgages. Reviewed by an adviser authorised under Fort Advice Bureau, FCA FRN 972730. Published 27 September 2026. Last reviewed 27 September 2026.

A limited company buy to let mortgage is a loan secured on a rental property that is owned by a limited company rather than by you personally. The company is the borrower and legal owner, the directors usually sign personal guarantees, and the company is taxed on its rental profit through corporation tax instead of income tax. Most lenders want a special purpose vehicle (SPV): a company that only holds property.

This guide gives you what most pages skip: the exact SIC codes lenders accept, a worked Section 24 comparison using the new property income tax rates coming in April 2027, why companies can borrow more under a 125% rental cover test, what personal guarantees really mean, the tax cost of moving existing properties into a company, a lender criteria table checked in September 2026, and the full cost list.

How does a limited company buy to let mortgage work?

You set up a company, usually an SPV, and the company buys the property and takes out the mortgage in its own name. The directors and shareholders are assessed as individuals: lenders check their credit files, their other properties and, in most cases, ask each of them to sign a personal guarantee for the company’s debt. The rent is paid to the company, the company pays the mortgage and running costs, and whatever profit is left is taxed at corporation tax rates.

Getting money out is a separate step. You can pay yourself dividends, which are taxed at dividend rates, repay any director’s loan you put in to fund the deposit (which is tax free because it is your own money coming back), or leave profits in the company to fund the next deposit. That last option is where the structure earns its keep for landlords who are building a portfolio rather than living off the rent. Lenders who offer limited company buy to let include high street names such as The Mortgage Works, Coventry, Leeds and Metro Bank, and a large specialist market. Rates are typically a little higher than for personal buy to let, and arrangement fees are often a percentage of the loan.

What SIC code does a buy to let limited company need?

Most lenders want your company registered with one or more of three property SIC codes at Companies House. Coventry’s buy to let criteria (checked September 2026) says it accepts only these codes and does not accept limited companies with any other SIC code. Leeds and Metro Bank list the same three.

SIC code	Description	Lender view
68100	Buying and selling of own real estate	Accepted by mainstream SPV lenders
68209	Other letting and operating of own or leased real estate	The core code for a letting SPV
68320	Management of real estate on a fee or contract basis	Accepted by most mainstream SPV lenders
41100	Development of building projects	Accepted by some specialist lenders only
Any trading code	For example a consultancy or retail business	Mainstream SPV products decline; some specialists lend to trading companies

If you already own a company with a trading SIC code, do not add property to it without advice. Mixing a trading business with rental property narrows the lender panel, complicates the accounts and can affect business asset reliefs later. Set up a clean SPV instead; Companies House incorporation is quick and inexpensive online.

Is a limited company better for buy to let? Section 24 explained

For higher rate taxpayers with mortgaged property, a company is often more tax efficient, and the gap widens from April 2027. The reason is Section 24 of the Finance (No. 2) Act 2015. Individual landlords cannot deduct mortgage interest from rental income. Instead they get a tax credit on their finance costs at the basic rate, currently 20%. A higher rate taxpayer pays 40% on the rent before interest and gets only 20% back on the interest.

Companies are outside Section 24. A company deducts its mortgage interest in full as a business expense and pays corporation tax on what is left: 19% on profits up to £50,000, 25% on profits over £250,000, with marginal relief in between (gov.uk, checked September 2026).

The 26 November 2025 Budget made this more pronounced. From April 2027, in England, Wales and Northern Ireland, property income gets its own tax rates: a property basic rate of 22%, higher rate of 42% and additional rate of 47%, with finance cost relief given at the 22% property basic rate (gov.uk policy paper, checked September 2026). Dividend tax rates also rose from April 2026, to 10.75% ordinary and 35.75% upper, so extracting company profit now costs more too. Scottish taxpayers have different income tax bands, so run your own figures.

Worked example: personal ownership vs limited company

An illustrative example with all the arithmetic shown. A higher rate taxpayer who already earns over £50,270 buys a property with a £300,000 interest only mortgage. Rent is £30,000 a year and running costs (letting agent, insurance, repairs, compliance) are £4,000. Personally, the mortgage rate is 5.0%, so interest is £15,000. Through a company, the rate is 5.4% (limited company products often price slightly higher), so interest is £16,200, and the company pays £1,200 a year extra accountancy. The dividend allowance is assumed to be used elsewhere.

Line	Personal 2026/27	Personal 2027/28	Limited company
Rent	£30,000	£30,000	£30,000
Running costs	£4,000	£4,000	£5,200 (incl. £1,200 accountancy)
Mortgage interest	£15,000 (not deductible)	£15,000 (not deductible)	£16,200 (deductible)
Taxable profit	£26,000	£26,000	£8,600
Tax before credit	£26,000 x 40% = £10,400	£26,000 x 42% = £10,920	£8,600 x 19% = £1,634
Finance cost credit	£15,000 x 20% = £3,000	£15,000 x 22% = £3,300	Not applicable
Tax payable	£7,400	£7,620	£1,634
Cash left after tax	£3,600	£3,380	£6,966 retained in the company
If all profit is paid out as dividends	Not applicable	Not applicable	£6,966 x 35.75% = £2,490 tax, £4,476 in your pocket

Even with a higher mortgage rate and extra accountancy, the company leaves £6,966 to reinvest against £3,380 personally from 2027/28, and still £4,476 if every penny is paid out as dividends. The personal effective tax rate on the £11,000 of real cash profit is about 69% in 2027/28 (£7,620 divided by £11,000). The picture reverses for a basic rate taxpayer with low borrowing, who loses little to Section 24 and would pay corporation tax plus dividend tax on top. Treat this as illustration, not tax advice; your accountant should model your own numbers.

Can you borrow more through a limited company? ICR 125% vs 145%

Usually, yes. Buy to let lenders size the loan with an interest coverage ratio (ICR): the rent must cover the mortgage interest at a stressed rate by a set margin. Because companies are not caught by Section 24, most lenders apply 125% to limited companies, while higher rate taxpayers borrowing personally typically face 145%. Coventry, for example, requires rent of 125% of the monthly interest at the higher of 5.5% or the product rate plus 2% for limited company buy to let, and Landbay applies 125% to limited companies (both checked September 2026).

Rent £1,500 a month (£18,000 a year), stress rate 5.5%	Calculation	Maximum loan
Higher rate taxpayer, personal name, 145% ICR	£18,000 / (1.45 x 5.5%)	£225,705
Limited company, 125% ICR	£18,000 / (1.25 x 5.5%)	£261,818

That is about £36,000 more borrowing on the same rent. Some lenders stress five year fixed rates at the pay rate rather than a notional rate (Landbay does, per its September 2026 criteria), which can raise the figure further. Use our buy to let mortgage calculator for a quick estimate and read buy to let affordability explained for how top slicing works.

Limited company buy to let lender criteria (checked September 2026)

Lender	Key published criteria
Coventry	SIC 68100, 68209 or 68320 only. ICR 125% at the higher of 5.5% or product rate plus 2%. Up to £1,500,000 at 50% LTV and £1,000,000 over 50% to 75% LTV. All directors and shareholders give a personal guarantee with independent legal advice. No first time buyers. Maximum 7 mortgages with the Coventry group, 15 buy to let mortgages in total, £2,500,000 aggregate.
Metro Bank	SIC 68100, 68209 or 68320. Maximum 80% LTV. ICR 125% at its standard stress rates. Personal guarantees required. Up to 4 directors and shareholders, who must be the same people. Non trading SPV holding residential property only. Maximum 10 properties in total. Maximum age 85.
Leeds Building Society	SIC 68100, 68209 or 68320. 75% and 80% LTV products. Maximum £500,000 per product. No minimum income, but income must be evidenced. Maximum 4 rental properties mortgaged with Leeds. Product sheet dated 22 September 2026.
The Mortgage Works	SPVs set up solely to buy, let and sell property, registered in England and Wales or Scotland. Minimum 25% deposit, or 20% where the EPC is C or above. First time, experienced and portfolio landlords considered. 1, 2 and 5 year products.
Landbay	Lends to SPV and trading limited companies. ICR 125%. Five year fixes stressed at pay rate; two year fixes and trackers at the greater of 5.5% or pay rate plus 2%. Standard maximum 75% LTV. £25,000 minimum income, waived for experienced landlords.

Criteria change often and product level terms override general criteria, so every case is checked on the day. Two market changes matter: Kent Reliance stopped new buy to let lending on 17 December 2025, and Precise’s buy to let range moved to OSB’s Rely brand. People also search for HSBC limited company buy to let; HSBC UK’s buy to let range has historically been aimed at individual borrowers, and we could not confirm a limited company product in its public criteria in September 2026, so check before you plan around it.

How much deposit do you need for a limited company buy to let?

Usually 25% of the purchase price, and 20% with some lenders. The Mortgage Works accepts a 20% deposit where the property has an EPC rating of C or above, and Metro Bank and Leeds offer products up to 80% LTV (all checked September 2026). In practice the rent often decides the loan rather than the LTV cap: if the property does not pass the 125% ICR at the maximum LTV, you will need a bigger deposit. The deposit can come from your own savings lent to the company as a director’s loan, from a gift, or from equity released from another property. Most lenders want to see where it came from. A director’s loan is usually the cleanest route, because it can be repaid to you tax free later from the company’s rental profits.

Do you need a personal guarantee for a limited company mortgage?

Almost always. Lenders lend to SPVs with no trading history and few assets, so they want the people behind the company to stand behind the debt. Coventry, for example, requires every named director and shareholder to give a personal guarantee and receive independent legal advice; Metro Bank also requires personal guarantees (both checked September 2026).

A personal guarantee means that if the company defaults and the property sells for less than the debt, the lender can pursue you personally for the shortfall, plus costs. Guarantees are usually joint and several: with two directors, the lender can chase either for the full amount. They are normally unlimited. So a limited company does not shield you from mortgage debt the way people assume; its benefits are tax and portfolio flexibility, not liability protection. Budget for the independent legal advice a lender requires, and read the guarantee before you sign it.

Can I transfer my buy to let properties into a limited company?

Yes, but the company is buying the property from you, so the transfer is treated as a sale at market value. That usually triggers capital gains tax for you and stamp duty for the company, and needs a new mortgage in the company’s name.

Cost	How it works	Example: property worth £250,000, bought for £150,000
Capital gains tax (you)	Gain at market value less the £3,000 annual exempt amount, at 18% or 24% for residential property	(£100,000 less £3,000) x 24% = £23,280 for a higher rate taxpayer
Stamp duty land tax (company, England and NI)	Charged on market value at the higher rates, which include the 5% surcharge	£125,000 x 5% plus £125,000 x 7% = £15,000
Refinance	Early repayment charges on the old mortgage, new lender fees, valuation and legal costs	Varies by lender

In Wales the company pays land transaction tax at the higher rates, and in Scotland LBTT plus the 8% additional dwelling supplement. Companies buying a single dwelling over £500,000 can face the 17% flat SDLT rate unless a relief, such as for a qualifying property rental business, applies.

Incorporation relief and partnership SDLT relief: the caveats

Two reliefs are often sold as a way round these costs. Incorporation relief under section 162 of TCGA 1992 can defer the capital gain when a whole business is transferred to a company in exchange for shares. The catch is that holding rental property is not automatically a “business”: in Ramsay v HMRC the tribunal accepted it because Mrs Ramsay spent around 20 hours a week managing the property personally. For transfers from 6 April 2026, the relief must be claimed in your self assessment return (HMRC manual CG65735, checked September 2026), and the option to elect out has been removed.

SDLT partnership relief can reduce stamp duty where a genuine, established partnership transfers property to a company, but HMRC scrutinises these arrangements and anti avoidance rules apply. Anyone selling a scheme that promises both reliefs with no risk deserves suspicion. Take specialist tax advice first. For many landlords the answer is to keep existing properties personal and buy new ones in a company. Our guide to reducing tax on rental income covers the other levers.

What does a limited company buy to let cost?

Cost	Typical range or basis
Company formation at Companies House	A small online fee; check the current Companies House fee
Annual accountancy and corporation tax return	Commonly £800 to £2,000 a year depending on the accountant and portfolio size
Annual confirmation statement	Fixed Companies House fee each year
Lender arrangement fee	Flat fee or a percentage of the loan; lower rates often carry higher fees
Valuation fee	Set by the lender based on property value
Legal fees	Higher than personal purchases, as the conveyancer also handles company documents and guarantees
Independent legal advice on guarantees	Required by some lenders, charged separately
Stamp duty	Higher rates on every purchase, including the first
ATED	Annual tax on company owned homes worth over £500,000; relief for let property, but a return is still required

Are limited company buy to let mortgage rates higher?

Generally slightly, but the gap has narrowed as more lenders compete for SPV business. Limited company products often carry a small rate premium and are more likely to have percentage arrangement fees. The correct comparison is the total cost over the fixed period after tax, not the headline rate. Because interest is deductible in a company, a higher rate costs a company less after tax than the same rate costs a higher rate individual under Section 24. Five year fixes are popular for SPVs, partly because some lenders stress them at the pay rate, which can improve borrowing. When the fix ends, a product transfer or buy to let remortgage follows the same company structure.

Can a limited company buy an HMO, holiday let or block?

Yes. SPV lending extends beyond single lets. HMO mortgages are widely available to limited companies, usually with experience requirements and HMO licence checks. Multi unit freehold blocks are mostly company lending. Holiday let mortgages for limited companies exist with a narrower set of lenders; the furnished holiday lettings tax regime was abolished from April 2025, so holiday lets now follow the same finance cost rules as other lets, which makes the company route relatively more attractive for higher rate taxpayers. Timescales for a limited company holiday let mortgage are similar to other SPV cases, typically four to eight weeks from application to offer once documents are in.

Why limited company applications get declined, and the fix

Reason	Fix
Wrong SIC code or a trading company	Use a new SPV with 68100, 68209 or 68320, or a lender that accepts trading companies
Rent fails the ICR at the chosen LTV	Choose a five year fix stressed at pay rate, add deposit, or use top slicing where offered
Director or shareholder with adverse credit	Specialist SPV lenders; all shareholders are usually assessed
Complex ownership, such as a holding company above the SPV	Lenders that accept layered structures; supply a clear ownership chart
First time landlord and first time buyer	Many lenders decline; build a track record or use a specialist
Too many properties for the lender’s cap	Move to a portfolio landlord lender

Illustrative Knox case: moving from personal to company ownership

An anonymised, illustrative case based on the type of enquiry we handle. A higher rate taxpayer in Greater Manchester owned three mortgaged terraced houses personally and wanted to buy a fourth. Her accountant had flagged that Section 24, and then the 42% property higher rate from April 2027, would push her effective tax on rental profit well above 60%.

We did not move the three existing properties. The capital gains tax and stamp duty on transfer would have cost more than several years of tax savings, and her involvement was not at the level needed to rely on incorporation relief. Instead she set up an SPV with SIC code 68209, lent the deposit to the company as a director’s loan, and bought the fourth property in the company. At 125% ICR the company could borrow enough on a 75% LTV five year fix, where the personal 145% test would have forced a larger deposit. She signed a personal guarantee after independent legal advice. Future purchases will go into the same company, funded partly by retained profit taxed at 19%, and the director’s loan comes back to her tax free over time.

How Knox arranges limited company buy to let mortgages

We compare limited company products across the whole market, check SIC codes and ownership before anything is submitted, model the rental cover at each lender’s stress rate, and package the directors’ personal documents alongside the company’s. We work with your accountant on structure; we do not give tax advice. Book a free, no-obligation discovery call. If you are comparing structures, our guides to SPV mortgages and buy to let mortgages cover the basics.

Limited company buy to let FAQs

Can a limited company get a buy to let mortgage?

Yes. Many UK lenders offer buy to let mortgages to limited companies, mostly to special purpose vehicles registered with SIC codes 68100, 68209 or 68320. Lenders including Coventry, Metro Bank, Leeds, The Mortgage Works and Landbay publish limited company criteria. Directors usually give personal guarantees and are credit checked as individuals.

Should I put my buy to let properties in a limited company?

For new purchases by higher rate taxpayers using a mortgage, often yes, because the company deducts interest in full and pays 19% to 25% corporation tax. For existing properties, often no, because the transfer usually triggers capital gains tax and stamp duty. Basic rate taxpayers with low borrowing may be better off personally. Take tax advice.

Do limited companies pay stamp duty on buy to let?

Yes. A company pays stamp duty at the higher rates on every residential purchase, including its first, because the 5% surcharge applies to companies buying dwellings. On a £250,000 purchase in England that is £15,000. Companies buying a single dwelling over £500,000 may pay a 17% flat rate unless a relief applies.

How much deposit do I need for a limited company buy to let?

Usually 25%, and 20% with some lenders. The Mortgage Works accepts 20% where the EPC is C or above, and Metro Bank and Leeds offer products up to 80% LTV (September 2026). The rental cover test can still force a larger deposit if the rent is low relative to the price.

Is mortgage interest tax deductible for a limited company?

Yes. Section 24 restrictions apply to individuals, not companies. A limited company deducts its mortgage interest in full as a business expense before corporation tax. An individual landlord only gets a basic rate credit, 20% now and 22% from April 2027 in England, Wales and Northern Ireland.

What ICR do lenders use for limited company buy to let?

Most use 125%, compared with 145% for higher rate taxpayers borrowing personally. The stress rate varies: Coventry uses the higher of 5.5% or the product rate plus 2%, while Landbay stresses five year fixes at the pay rate (September 2026). This is why companies can often borrow more on the same rent.

Can I transfer my buy to let into a limited company without paying tax?

Rarely. The transfer is a sale at market value, so capital gains tax and stamp duty are normally due. Incorporation relief can defer the gain only if the letting is a genuine business, and from 6 April 2026 it must be claimed in your self assessment return. Partnership SDLT relief has strict conditions. Take specialist tax advice first.

Are limited company buy to let mortgage rates higher?

Often slightly higher than personal buy to let, with more percentage arrangement fees, though the gap has narrowed. Compare the after tax cost: a company deducts all its interest, so a marginally higher rate can still leave a higher rate taxpayer better off than borrowing personally under Section 24.

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