Taking out a buy to let mortgage as a limited company is very different to taking one out as an individual as it’s a commercial deal.
Though it may be slightly more complicated to set up, it does come with advantages.
- You pay corporation tax on rental income, not income tax. There is no upper threshold as opposed to personal income tax and it stands at 19%.
- You can offset many expenses that you can’t with a privately-owned rental property.
- Limited liability if the company dissolves it’s not forced to sell personal assets.
- Retaining any profits within your business protects tax liabilities. This helps if and when you want to expand your portfolio.
More people are choosing to buy to let through limited companies for these advantages.
This in turn has seen an increased demand for lenders in this market.
To get a mortgage through a limited company you need to get the right advice and help so you stand the best chance of being approved with an appropriate lender.
Firstly, you should speak to a tax advisor or accountant. They can help you set up a limited company specifically for buy to let property purchases in the right way. This means setting you up as a Special Purpose Vehicle (SPV) or using specific Standard Industry Classifications (SIC). You’ll need to do this before you even start the mortgage application process.
However, once this is done you’ll stand a better chance of approval by speaking to a specialist mortgage advisor. They understand the criteria lenders are looking for and will be able to place you with one based on your individual circumstances.
If you have questions or want to speak to an expert for advice on getting a buy to let mortgage through a limited company, get in touch today.