A property SPV, short for special purpose vehicle, is a limited company set up only to buy, hold and let property. Many UK investors now buy through an SPV because the company can deduct mortgage interest in full and pays corporation tax rather than income tax on rental profits. The structure brings its own costs and rules, though, and the savings depend on how you take money out. This guide explains how property SPV accounting works and the points investors most often get wrong.
- What a property SPV is
- Setting up an SPV
- How an SPV is taxed
- Mortgage interest and finance costs
- Taking money out of the company
- Stamp duty, ATED and selling property
- Moving existing properties into an SPV
- Accounts, returns and deadlines
- When an SPV makes sense
- Frequently asked questions
What a property SPV is
An SPV is an ordinary private limited company registered at Companies House, with a narrow purpose. It owns the properties, takes out the mortgages and receives the rent. Lenders prefer SPVs that do nothing else, which is why most investors keep property in a separate company from any trading business they run.
The SIC codes lenders expect to see are 68100 (buying and selling of own real estate), 68209 (other letting and operating of own or leased real estate) and 68320 (management of real estate on a fee or contract basis). Using the right codes from the start avoids problems when you apply for buy to let finance.
Setting up an SPV
Before you incorporate, decide who will own the shares and who will be a director. Share ownership controls who receives dividends and how the company passes to the next generation, so it is worth planning with a spouse or family members at the outset rather than changing it later. Lenders usually ask directors and major shareholders for personal guarantees.
Every director and person with significant control now needs to verify their identity with Companies House. Open a business bank account in the company name and keep all rent and costs going through it. Mixing personal and company money is the fastest way to create a tax problem.
How an SPV is taxed
The company pays corporation tax on its rental profits. The rate is 19% on profits up to £50,000 and 25% on profits above £250,000, with marginal relief between the two. Those thresholds are shared between associated companies, so if you control more than one company the limits are divided between them.
Individual landlords pay income tax on rental profits at their marginal rate. From April 2027 the government plans to raise the income tax rates on property income for individuals to 22%, 42% and 47%. That change does not apply to companies, which widens the gap between the two structures for higher rate taxpayers.
Mortgage interest and finance costs
This is the main reason investors use an SPV. An individual landlord cannot deduct mortgage interest from rental income. Instead they receive a tax credit worth 20% of the interest, so a higher rate taxpayer loses relief on part of every interest payment.
A company deducts mortgage interest and arrangement fees in full as a business expense. Only very large groups with more than £2 million a year of net interest face a restriction. For a geared portfolio this difference alone often decides the question.
Taking money out of the company
Profits inside the company belong to the company. When you take money out, there is usually a second layer of tax. The main options are:
- Dividends. From April 2026 dividend tax is 10.75% in the basic rate band, 35.75% in the higher rate band and 39.35% for additional rate taxpayers, after a £500 dividend allowance.
- Director loan repayments. If you lent the company the deposit, it can repay that loan tax free as cash allows. Keep a clear record of the loan from day one.
- Salary. A small salary is possible if you carry out work for the company, although it rarely suits an SPV with no other employees.
- Leaving profits in the company. Many investors reinvest profits into more property and draw little, which is where an SPV works best.
If you need all the rental profit to live on, the combined corporation tax and dividend tax can exceed the tax you would pay as an individual. Model your figures before you buy.
Stamp duty, ATED and selling property
Companies buying residential property in England and Northern Ireland pay the higher rates of stamp duty land tax, which include a 5% surcharge on top of the standard rates. A flat 17% rate applies to purchases over £500,000 by companies, unless relief applies, and property rental businesses usually qualify for that relief.
The Annual Tax on Enveloped Dwellings applies to residential properties worth more than £500,000 held in a company. Let properties normally qualify for relief, but the company must still file an ATED return each year to claim it.
When the company sells a property, the gain is part of its taxable profits and is charged to corporation tax. There is no annual exempt amount for companies.
Moving existing properties into an SPV
Transferring properties you already own into a company is treated as a sale at market value. That can trigger capital gains tax for you and stamp duty for the company, as well as refinancing costs. Incorporation relief can defer the capital gains tax where the letting activity amounts to a business, which usually requires a substantial portfolio and active management. Each case turns on its facts, so take advice before you move anything. Our guide to capital gains tax on property explains the personal side.
Accounts, returns and deadlines
An SPV has the same filing duties as any limited company:
- Annual accounts filed at Companies House within nine months of the year end.
- A corporation tax return filed within 12 months of the year end, with the tax paid nine months and one day after the year end.
- A confirmation statement each year.
- ATED returns where relevant, and Self Assessment returns for directors who receive dividends.
Good records make the year end quicker and cheaper. Keep completion statements, mortgage statements, letting agent statements and invoices for repairs, and separate repairs from improvements, because improvements are not deductible against rent.
When an SPV makes sense
An SPV usually suits investors who are higher rate taxpayers, use mortgage finance, plan to build a portfolio and can leave profits in the company. It is usually a weaker fit for a single property, a basic rate taxpayer or someone who needs all the income to live on. Our article on whether a limited company for rental properties is worth it compares the two side by side, and our property accountants can run the figures for your portfolio.
Need an accountant for your property company?
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Frequently asked questions
What is a property SPV?
It is a company that exists only to hold rental property. Lenders prefer SPVs because the company has no other trading activity.
Which SIC code should a property SPV use?
Most buy to let SPVs use 68209 for letting their own property. Some add 68100 for buying and selling property or 68320 for property management.
Can an SPV deduct mortgage interest?
Yes. Mortgage interest and finance costs come off rental income in full. Individual landlords only receive a 20% tax credit on their interest.
How do I get money out of a property SPV?
The main routes are dividends, repayment of money you have lent the company and, less often, salary. Dividends are taxed on you personally after corporation tax has been paid by the company.
Do I pay more stamp duty buying through a company?
Yes. Companies pay the higher residential rates, which carry a 5% surcharge. Purchases over £500,000 can attract a 17% rate unless property rental relief applies.
Is an SPV worth it for one property?
Often not. The extra accounting costs, higher mortgage rates and the second layer of tax on dividends can outweigh the savings on a single property. An SPV tends to pay off for higher rate taxpayers building a geared portfolio.
