Some property investors choose to purchase buy-to-let property through a limited company rather than in their own name. It's not automatically the better option — it depends on your personal tax position, plans, and how many properties you intend to hold.
Reasons investors consider this structure
- Mortgage interest is generally treated as a company expense, rather than facing the personal restrictions that apply to individual landlords
- Company profits are taxed at corporation tax rates, which may be lower than an individual's higher-rate income tax
- It can make it easier to hold and grow a portfolio across multiple properties
Trade-offs to weigh up
- Mortgage rates for limited company buy-to-let borrowing are often higher than for personal buy-to-let mortgages
- Extracting profit from the company (as dividends or salary) is a separate taxable event
- Additional accounting and filing obligations apply to running a limited company
- Transferring existing personally-owned properties into a company can trigger Stamp Duty and Capital Gains Tax
This is a decision worth taking advice on: the right structure depends heavily on your income, portfolio size, and long-term plans — a specialist property accountant can model both scenarios for your situation.
Is it harder to get a mortgage through a limited company?
It's a smaller, more specialist part of the mortgage market, so fewer lenders offer it and rates can be higher — an independent mortgage broker experienced in this area can help identify suitable options.
Can I move my existing rental properties into a company?
Yes, but it's generally treated as a sale from you to the company, meaning Stamp Duty and potentially Capital Gains Tax can apply — always model the cost carefully before proceeding.
This guide is for general information only and is not tax or financial advice. Speak to a qualified accountant and, where relevant, an independent mortgage broker before deciding on a structure.