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What is Special purpose vehicle (SPV)?
Last verified 23 October 2026
A special purpose vehicle (SPV) is a limited company set up only to buy, hold and let property. Buy-to-let investors use one so that the rental business is owned by the company rather than by them personally.
Why it matters to landlords
The main tax difference is mortgage interest. Individual landlords get relief for residential finance costs only as a basic rate tax reduction, but UK resident and non-UK resident companies are not affected by that restriction and keep deducting interest and other finance costs in the usual way. Company profits pay Corporation Tax: 19% on profits of £50,000 or less and 25% on profits above £250,000, with marginal relief in between. From 6 April 2027, individuals pay separate property income tax rates of 22%, 42% and 47% in England, Wales and Northern Ireland.
A company also brings extra administration and running costs, and taking money out, for example as dividends, can mean more tax for the owners. Moving properties you already own into a company can have tax consequences of its own, so get advice before doing it.
Example
Two investors set up a company to buy a house with a £150,000 mortgage at 5%. The £7,500 of interest is deducted from the company's rental profit before Corporation Tax. If they owned the house personally, the interest would only give a tax reduction at the basic rate.
Related terms
- Limited company buy-to-let
- Section 24
- Finance cost restriction
- Property income rates
- Incorporation Relief