More landlords in Northern Ireland are choosing to buy investment property through a limited company rather than in their own name. If you are weighing up your next purchase, or thinking about how to structure a growing portfolio, you have probably come across the idea of a "limited company" or "SPV" buy-to-let mortgage. This guide explains what that means, why some landlords do it, the trade-offs to be aware of, and how to work out which route is right for you.
Important first note: the sections below touch on tax. Tax is not something we advise on as a mortgage broker, and the right structure genuinely depends on your personal circumstances. Anything to do with tax should be confirmed with a qualified accountant or tax adviser before you make a decision. What we can do is arrange the mortgage once you have decided on the right structure, and work alongside your accountant to do it.
What is a limited company buy-to-let mortgage?
Instead of buying a rental property in your own name, you set up (or use) a limited company, and the company owns the property and holds the mortgage. Most lenders prefer the company to be a "special purpose vehicle" (SPV): a company set up specifically to hold property, rather than a business that also trades in something else. Setting one up is straightforward, and your accountant can help you register it with the right activity codes that lenders look for.
The mortgage itself works in a similar way to a personal buy-to-let mortgage, but it is granted to the company. In almost all cases the lender will also ask the company directors to provide a personal guarantee, so you remain personally responsible for the borrowing.
Why do some landlords use a limited company?
The main reason is tax, and it comes down to how mortgage interest is treated.
Since the rules known as Section 24 were fully introduced, individual landlords can no longer deduct their mortgage interest from their rental income before working out their tax bill. Instead, they receive only a basic-rate (20%) tax credit on that interest, regardless of the rate of tax they actually pay. For higher-rate and additional-rate taxpayers with sizeable mortgages, that can make a real difference to the numbers.
A limited company is treated differently. A company can still deduct its mortgage interest as a normal business expense, and its profits are taxed at corporation tax rates (currently 19% on profits up to £50,000, 25% on profits above £250,000, with marginal relief in between) rather than at personal income tax rates. For some landlords, particularly higher-rate taxpayers who are reinvesting rather than drawing the income, that can be more efficient. For others, it is not worth the extra cost and complexity. This is exactly the kind of thing to model with an accountant.
The trade-offs to be aware of
Buying through a company is not automatically better. The points below are the ones worth going in with your eyes open to.
- Fewer lenders, though the market is growing. Not every lender offers limited company buy-to-let, so the choice is narrower than for personal buy-to-let. This is one area where using a broker really helps, because we know which lenders are active in this space.
- Rates and fees can look different. Headline rates on limited company products are sometimes a little higher, and they can come with higher arrangement fees, so it is important to compare the overall cost rather than just the rate.
- Running costs. A company has to file accounts and a company tax return, which usually means ongoing accountancy fees you would not have as an individual.
- Getting money out. Rental profit sits inside the company. Taking it out personally (as salary or dividends) can create a further tax charge, which is part of why the company route tends to suit landlords who are reinvesting.
- Personal guarantees. As above, directors are almost always asked to guarantee the mortgage personally.
Personal name or limited company: how to decide
There is no one-size-fits-all answer. The right choice depends on your tax position, whether you are keeping the income or reinvesting it, how many properties you plan to hold, and your longer-term plans for the portfolio. As a rough guide, the company route is most often considered by higher-rate taxpayers building or holding a portfolio, while a single property for extra income is frequently held personally. The sensible approach is to model both with your accountant, and then let us find the right mortgage for whichever structure you choose.
What lenders look at
For a limited company buy-to-let, lenders will typically consider:
- The company set-up: usually an SPV with the right activity codes.
- Rental cover (the stress test): lenders check that the expected rent comfortably covers the mortgage, often to a higher multiple than for residential mortgages.
- Deposit: typically 20-25% or more of the property value.
- The directors: your personal income, experience as a landlord, and credit history, plus the personal guarantee.
Already a landlord? Moving existing properties into a company
If you own rental property personally and are thinking of moving it into a company, tread carefully and take advice first. Transferring a property you already own into your own company is generally treated as a sale at market value, which can trigger Stamp Duty Land Tax (including the 5% additional-property surcharge) and potentially Capital Gains Tax. For some portfolios those one-off costs are significant, so this is very much a conversation for your accountant before anything else.
What about Northern Ireland specifically?
The mortgage market and lenders are broadly UK-wide, so Northern Ireland landlords have access to the same limited company buy-to-let lenders as the rest of the UK. Stamp Duty Land Tax applies here as it does in England, including the additional-property surcharge; you can read more in our guide to stamp duty in Northern Ireland. Being based here, we understand the local rental market and can help you put the finance in place.
How CGR Financial can help
Limited company buy-to-let is a specialist area, and not every lender operates in it. We have access to a wide range of lenders, including those that offer limited company and SPV products, and we are happy to work alongside your accountant so the mortgage fits the structure you have chosen. If you are planning your next purchase or reviewing how your portfolio is set up, talk to us and we will talk you through your options.
This article is for general information only. It is not tax, legal, or financial advice, and it should not be relied on when making a decision. The tax treatment of buy-to-let property depends on your individual circumstances and may change in the future; please seek advice from a qualified accountant or tax adviser.
Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. CGR Financial Ltd is an Appointed Representative of PRIMIS Mortgage Network, a trading name of First Complete Ltd. First Complete Ltd is authorised and regulated by the Financial Conduct Authority.