Deposit & mortgage

Buying property through a limited company

More landlords now buy through a limited company than as individuals, largely because of how rental profits and mortgage interest are taxed. But a company structure is not automatically better: it brings its own costs, complexity and tax bills. This guide explains how it works and who it tends to suit.

Last reviewed 26 June 2026

In short

Buying property through a limited company means a company (usually a special purpose vehicle, or SPV) owns the property rather than you personally. It's mainly used for buy-to-let, because companies can deduct mortgage interest as a business expense and pay corporation tax on profits, whereas individual landlords only get a basic-rate tax credit on mortgage interest. The downsides include limited-company mortgage rates that are often higher, extra accounting and filing costs, stamp duty surcharges that still apply, and tax to pay when extracting profits as dividends. It tends to suit higher-rate taxpayers building a portfolio, but you should always take specialist tax advice for your situation.

Why landlords use a limited company

The big driver is mortgage interest relief. Individual landlords can no longer deduct mortgage interest from rental income before tax; instead they get a basic-rate (20%) tax credit. For higher and additional-rate taxpayers, that change sharply increased tax bills on geared (mortgaged) properties.

A limited company is taxed differently. It pays corporation tax on its profits after deducting allowable costs, including mortgage interest in full. For landlords with mortgages and higher personal tax rates, this can leave more profit inside the company, especially when reinvesting rather than drawing income.

Personal ownership vs limited company

A simplified comparison, the right choice depends on your income, plans and portfolio size.

	Own name	Limited company (SPV)
Tax on profit	Income tax (20/40/45%)	Corporation tax
Mortgage interest	Basic-rate tax credit only	Fully deductible as expense
Mortgage rates	Generally lower	Generally higher
Extracting profit	It's already yours	Dividend or salary, taxed again
Admin	Self-assessment	Annual accounts, corporation tax, filings
Stamp duty surcharge	Applies on additional homes	Applies (and from the first property)

Companies face extra running costs but can be more tax-efficient for geared portfolios.

Advantages of a company structure

Mortgage interest is fully deductible against rental income.
Corporation tax can be lower than higher personal income tax rates.
Profits can be retained and reinvested tax-efficiently.
Easier to bring in partners or pass shares to family over time.
Potential inheritance and succession planning benefits.

Disadvantages to weigh up

Limited-company mortgage rates and fees are usually higher.
Annual accounting, corporation tax returns and filing costs.
You pay tax again (dividend tax) when taking money out.
Stamp duty additional-property surcharge still applies.
Transferring existing personal properties into a company can trigger stamp duty and capital gains tax.

Moving existing properties is costly

Transferring a property you already own personally into a company is usually treated as a sale, potentially triggering capital gains tax and a fresh stamp duty bill (including the surcharge). Take tax advice before restructuring.

What is an SPV and who should consider one

Most landlords use a special purpose vehicle (SPV): a limited company set up solely to hold property, using specific SIC codes for property activities. Buy-to-let lenders prefer SPVs because the company's only business is property, making it simpler to assess.

A company structure tends to suit higher-rate taxpayers building or holding a mortgaged portfolio who plan to reinvest profits. It is rarely worthwhile for a single, low-geared property held by a basic-rate taxpayer. Because the maths depends on your income, plans and the latest tax rates, professional advice is essential before deciding.

Common questions

Is it better to buy property through a limited company?

It can be for higher-rate taxpayers with mortgaged buy-to-lets, because companies deduct mortgage interest in full and pay corporation tax. For basic-rate taxpayers or single low-geared properties, personal ownership is often simpler and cheaper. Take tax advice.

What is an SPV for property?

A special purpose vehicle is a limited company set up solely to hold property investments, using property-specific SIC codes. Buy-to-let lenders generally prefer SPVs because their only activity is property.

Do you pay stamp duty buying through a company?

Yes, and the additional-property surcharge applies, typically from the company's first purchase. Very high-value residential purchases by companies can also face higher flat rates, so check the current rules.

Can I move my existing rentals into a company?

You can, but it's usually treated as a sale, which can trigger capital gains tax and a new stamp duty bill including the surcharge. The costs can be significant, so get specialist advice first.

Are limited company mortgage rates higher?

Generally yes. Limited-company buy-to-let mortgages often carry higher rates and fees than personal buy-to-let deals, which offsets some of the tax advantage. A broker can compare the true cost.

How do I take profit out of a property company?

Usually as a salary or dividends, both of which are taxable in your hands. This 'second layer' of tax is why retaining and reinvesting profits inside the company is often more efficient than drawing income.

Does corporation tax make companies always cheaper?

No. While corporation tax may be lower than higher-rate income tax, you still pay tax when extracting profit, plus extra running costs. The overall benefit depends on your income, gearing and whether you reinvest.

Do I need an accountant for a property company?

In practice yes. A company must file annual accounts and a corporation tax return, and a property-savvy accountant helps you stay compliant and structure things tax-efficiently. Budget for these ongoing costs.

Sources

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