Buy-to-Let Limited Company: Should You Hold Property Through a Company?

Since Section 24 restricted mortgage interest relief, a lot of landlords have asked the same question: should I hold my buy-to-lets through a limited company? For some it’s a smart move; for others it’s an expensive mistake. Here’s how to tell which you are.

Why landlords consider it

The trigger for most is Section 24. Individual landlords can no longer deduct mortgage interest properly — they get a 20% tax credit instead — which hits higher-rate taxpayers hard.

A limited company doesn’t have this problem. Companies deduct mortgage interest in full against their profits, then pay Corporation Tax (19–25%) rather than your personal Income Tax rate. For a geared, higher-rate landlord, that can mean materially less tax.

The advantages

Full mortgage interest relief — no Section 24
Lower tax on retained profit — Corporation Tax rates, and profit kept in the company to buy more property isn’t taxed as your income
Reinvestment efficiency — great if you’re building a portfolio rather than drawing the income
Succession and inheritance planning — shares can be passed on more flexibly than property

The downsides

It’s not a free win:

More admin and cost — annual accounts, a Corporation Tax return, a confirmation statement, and accountancy fees
Higher mortgage rates — buy-to-let lending to companies (usually via an SPV) tends to cost more
A second layer of tax — when you take profit out as dividends, you pay dividend tax personally on top of the company’s Corporation Tax
Expensive to move existing property in — transferring your personal buy-to-lets to a company is treated as a sale at market value, triggering Capital Gains Tax and the Stamp Duty surcharge

The key question: income or growth?

A useful way to frame it:

Building a portfolio and reinvesting? A company often wins — you keep more profit working, taxed at Corporation Tax rates.
Want the rental income to live on now? The dividend tax on extraction erodes the advantage, and personal ownership may suit you better.
Higher-rate taxpayer with mortgages? The Section 24 saving is biggest for you.
Basic-rate taxpayer, low gearing? A company often isn’t worth the extra cost and complexity.

New purchases vs existing properties

For new purchases, choosing the company route from the start avoids the costly transfer problem. For existing personally-held properties, the CGT and stamp duty of moving them in can outweigh the benefit — so the decision is very different depending on whether you’re buying fresh or restructuring.

Model it before you commit

This is one of the most consequential — and most over-simplified — decisions in property. The right answer depends on your tax band, your gearing, your plans and whether it’s new or existing property. Our tax planning service models personal versus company ownership on your real numbers, and our accountants for landlords and limited company accountants run whichever structure you choose — so you decide on facts, not a forum rumour.

Frequently asked questions

Is it better to buy property through a limited company?

It can be, especially for higher-rate taxpayers with mortgaged buy-to-lets, because a company deducts mortgage interest in full (avoiding Section 24) and pays Corporation Tax rather than Income Tax. But it adds admin, mortgage rates are usually higher, and extracting profit has its own tax. It's a numbers decision that depends on your tax band, gearing and plans.

What are the tax advantages of a buy-to-let limited company?

The main one is full mortgage interest relief — companies aren't affected by Section 24, so they deduct all their interest against profit. Company profits are taxed at Corporation Tax rates (19–25%) rather than your personal Income Tax rate, and retained profits can be reinvested in more property efficiently. Companies also have more flexibility for inheritance and succession planning.

What are the downsides of a property limited company?

More admin and cost (annual accounts, Corporation Tax, a confirmation statement), usually higher buy-to-let mortgage rates and fees, and a second layer of tax when you extract profit as dividends. Moving existing personal properties into a company also triggers Capital Gains Tax and the Stamp Duty surcharge, which can be expensive.

Can I move my existing buy-to-lets into a limited company?

Yes, but it's treated as a sale to the company at market value, which can trigger Capital Gains Tax on the gain and the Stamp Duty surcharge on the company's purchase. For larger portfolios, incorporation reliefs may reduce the CGT, but it's complex — model it carefully before acting, because the upfront costs can be significant.

How much profit do you need for a limited company to be worth it?

There's no fixed figure — it depends on your tax band, how geared your properties are, and whether you'll keep the profit in the company to buy more. Higher-rate landlords with mortgages and plans to grow a portfolio benefit most; lower-rate landlords who want the income to live on often don't. We model it on your actual numbers.

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Reviewed by Provense Accountants

Written and reviewed by our team of qualified accountants (AAT-regulated). This guide is general information, not personal tax advice — book a free consultation for advice on your situation.