Buying Property via an SPV Company: Is it Right for You in 2026/27?

The SPV has moved from a niche strategy to mainstream necessity. As personal tax rules for landlords tighten, a dedicated limited company offers structural advantages that personal ownership simply cannot match - particularly for higher-rate taxpayers with growing portfolios.

The Section 24 problem

Since April 2020, individual landlords have been unable to deduct mortgage interest as an expense against their rental income. Instead, they receive a basic rate (20%) tax credit on their finance costs. For a higher-rate taxpayer, this is devastating: you are paying 40% or 45% income tax on gross rental profit, then receiving a 20% credit - effectively losing tax relief on half your mortgage interest. A landlord with £20,000 in rent and £12,000 in mortgage interest now pays tax on £20,000, not £8,000.

Inside a limited company, this restriction does not apply. Mortgage interest is a fully deductible business expense, reducing the profit on which Corporation Tax is charged. For a higher-rate taxpayer with significant mortgage debt, the difference in annual tax can be several thousands of pounds per property.

Key advantages of the SPV structure

• Full mortgage interest relief - unlike personal ownership under Section 24, all finance costs are deductible from profit before Corporation Tax.
• Lower effective tax rates - Corporation Tax at 19%–25% versus income tax at 40%–45% for higher-rate taxpayers.
• Profit reinvestment - profits left inside the company are taxed at the lower CT rate and can be reinvested to purchase further properties without a personal income tax charge.
• Inheritance planning - shares in an SPV can be gifted or transferred more flexibly than bricks-and-mortar property, and may qualify for Business Property Relief from IHT in certain circumstances.

The complications you need to understand

Transferring existing properties into an SPV is not simple. If you already own buy-to-lets personally and want to move them into a company, you are making a disposal for Capital Gains Tax purposes (at the current market value, not the price you paid) and a new acquisition for Stamp Duty Land Tax purposes. Unless Incorporation Relief applies (which requires the existing portfolio to constitute a genuine business), both taxes are triggered - often making the transfer prohibitively expensive for established landlords with significant gains.

This is why the SPV route is most efficient for new acquisitions, not retrofitting an existing personal portfolio.

Mortgage market considerations

Limited company buy-to-let mortgages are widely available but typically carry a slightly higher interest rate than personal mortgages - the spread has narrowed significantly in recent years but remains. You should model whether the tax saving from the corporate structure outweighs the additional mortgage cost. For most higher-rate taxpayers with leveraged portfolios, the tax saving wins comfortably, but the maths should be done for your specific situation.

Lenders will typically require personal guarantees from the directors of an SPV for residential buy-to-let. This means the limited liability protection of the company does not extend to the mortgage itself - though it does protect you from other business creditors.

Extracting profits from the SPV

Profits in the SPV are subject to Corporation Tax. To access the money personally, you need to extract it as salary or dividends, which triggers further personal tax. The total tax on income extracted from an SPV is therefore not simply the Corporation Tax rate - it is a combined rate that depends on how much you take out. Many property investors leave profits inside the company to fund further purchases, only drawing what they need for personal expenditure.