Limited Company BTL

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Limited Company BTLs

Buying a Buy to Let through a Limited Company is a fast growing marketplace. So much so the amount of lenders being able to offer them has rocketed in the last couple of years.

Whilst we cannot offer advice on the way you purchase a Buy to Let whether it be through a Limited Company or in your personal names we would recommend speaking to a Tax Adviser who could talk you through the differences.

Special Purpose Vehicles

When you buy a property through a buy to let this is done via what is known as a Special Purpose Vehicle (SPV). This is a company that has been set up solely for the purpose of buying and renting out properties.

Most mortgage lenders will not allow you to use an active trading company to buy a property as the SPV has to have a specific SIC code and as mentioned, only being used for buying and renting properties

What SIC Code Does My SPV Need To Have?

There are normally three codes that a lender will accept for a Limited Company Buy to Let application. Without one of these you could not complete a Limited Company BTL application.

68209 – Other letting and operating of own or leased real estate

68100 – Buying and selling of own real estate

68320 – management of real estate on a fee or contract basis

Why Would I Use a Limited Company to Buy a BTL?

The growth of Limited Company BTLs coincides with the taxation changes the government made for Buy to Let landlords over the last few years.

As it falls under Tax Advice it’s not something we can assist you with in deciding if it’s the right way for you to purchase a property but we do recommend speaking to a Tax Advisor to determine if it would work for you

Are Limited Company BTLs Assessed Differently?

Overall – no. They aren’t assessed any differently from a Standard Buy to Let. The directors of the Limited Company are assessed as if they were buying in their personal names it’s just the owner listed on Land Registry is slightly different as it will be the SPV as opposed to you.

There is a slight difference on stress test that lenders will use just due to the tax differences between buying in personal names vs buying via a company.

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