A limited company buy to let is when you take out a mortgage against a property in a company name instead of your personal name. Some investors set up a company for the sole purpose of owning properties due to the tax benefits on offer with this type of mortgage.

If your company is trading then you can’t take out a mortgage through this company, you will need to set up an SPV (Special Purpose Vehicle) and the sole purpose of this will be for purchasing and letting properties. This will require your company to be set up with the correct SIC codes, so it’s always best to speak to an accountant to be sure the correct SIC codes are registered.

This type of mortgage has its own set of criteria that needs to be met with the lender for an application to be accepted. If you sell your property to your limited company this must be done at open market value, even though you own the property you cannot apply discounts due to tax implications.

This will trigger stamp duty and capital gains tax charges due to the legal transfer of ownership of a property portfolio being in a limited company name instead of your personal name. This means that the company will have legal ownership of the portfolio.

Owning a buy to let property through a limited company isn’t always beneficial for everyone as the lender will weigh up your circumstances and take your financial situation into consideration. The fees and interest rates are usually higher on these types of mortgages and there are a limited number of products available in comparison to a regular buy to let mortgage.

LTC Mortgages are here to ensure you get the best advice on whether this is the best decision for you or not. We are mortgage advisors based in Liverpool and throughout this city there are hundreds of properties being rented out and we have a lot of experience and knowledge within the buy to let mortgage sector, with research being done on a regular basis so that we are kept up to date with the current and upcoming news and changes to the market.