What is an SPV, and when are they used?
Many commercial and investment properties are bought through an "SPV". Here is what that is, why people use one, and the trade-offs.
Written by Matt Vincent DipFA, CeMAP, CeRER, BSc · Published 25 June 2026 · Version 1.0 · 5 min readAn SPV, a Special Purpose Vehicle, is simply a limited company set up to do one thing: in this case, to hold property. It's sometimes called a "PropCo". The company owns the property and takes out the mortgage, rather than you owning it personally.
When SPVs are used
SPVs are most common with investment (let) property and property portfolios. You'll typically see one when someone is buying buy-to-let or commercial property to rent out, building a portfolio, or undertaking a development.
Lenders generally like a "clean" SPV that does nothing except hold property, because it's simpler to understand and the risks are contained. New SPVs are set up with specific company codes (SIC codes) that show the company exists to buy, sell or let property.
Why people use them
- Tax treatment. Profits are taxed as company profits rather than personal income, which can be more efficient for some investors, though this depends entirely on your circumstances and is a question for an accountant.
- Ring-fencing risk. Each property (or group) can sit in its own company, so a problem with one doesn't automatically threaten the others.
- Easier ownership changes. Selling or passing on the shares in the company can be simpler than transferring the property itself.
- Lender preference. Many specialist lenders are comfortable lending to a clean SPV.
Pros
- Potential tax efficiency for investors
- Keeps property risk contained and tidy
- Well supported by specialist lenders
- Can make portfolios easier to manage and pass on
Cons
- Costs and admin of running a company (accounts, filings)
- Lenders usually require personal guarantees from directors
- Not always the best route, depends on your tax position
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This guide was published on 25 June 2026 (version 1.0) and reflects our understanding at that time. It is general information about commercial mortgages, not financial advice or a recommendation. Lending criteria, interest rates and tax rules change over time, so please confirm current details with a qualified advisor before acting. Reference: PL-CM-SPV-v10.