Limited company buy to let mortgages...

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Buying to let in a limited company name in the UK has some major advantages over buying to let in your own name. Significantly, if you come to sell properties you have bought using standard buy to let mortgages, you are liable to pay capital gains tax on the proceeds of the sale. On the other hand, if you have bought them in a limited company name then you will be required to pay corporation tax, as the proceeds are company profits rather than personal profits. This can dramatically reduce the tax liability calculation. For professional advice on the potential tax benefits of limited company buy to let, we advise you to contact a chartered accountant.

Although there are fewer limited company buy to let lenders than those who lend on a standard buy to let basis, the market is widening: there are even some banks who now specifically tailor their buy to let mortgage range to limited companies. This shows that the financial services industry has great faith in the potential that the limited company market offers, which in turn points towards a bright future for the limited company property investor.

Standard buy to let products may also not be appropriate for certain types of property developers: most lenders require a minimum mortgage term of five years, so if you are buying and selling each property in a short space of time, say 1 to 2 years, it will be impossible to build up any sort of relationship with a lender you trust. It is also generally not possible to borrow further funds to develop a property on a standard buy to let product.

The range of mortgages available to UK property developers is less broad than the standard buy to let market, and can be more complex, so it makes sense to actively seek advice rather than simply searching for the products that have the lowest rates.

NOTE that Buy to Let Mortgages are NOT regulated by the Financial Services Authority