By 2024, UK Finance data showed the majority of new buy-to-let mortgage applications were already being made through limited companies rather than in a landlord’s own name — and that shift has continued into 2026. It isn’t a fashion trend; it’s a direct response to tax rules that treat personal and corporate landlords very differently. But limited company ownership isn’t automatically the right answer for every landlord, and the decision deserves proper comparison rather than assumption.
The tax difference that’s driving the shift
The core issue is Section 24, which restricts individual landlords to claiming mortgage interest as a basic-rate tax credit rather than a full deduction against rental income. Limited companies are not subject to this restriction — a company can deduct 100% of its mortgage interest as a business expense before calculating profit, and profits are then taxed at corporation tax rates, which for most landlords sit well below their personal higher or additional rate of income tax.
For a higher-rate taxpayer with a leveraged portfolio, this difference is often substantial enough to outweigh the additional costs of incorporation — but it isn’t automatic, and it depends heavily on your income tax band, gearing level, and long-term plans (including how and when you eventually want to extract profit or sell).
Stamp duty: the cost that applies either way
Whether you buy personally or through a limited company, buy-to-let and second-home purchases in England currently attract a 5% stamp duty surcharge on top of standard rates, applying to the whole purchase price from the first pound above £40,000 (the surcharge rose from 3% to 5% in October 2024, and the standard nil-rate threshold returned to £125,000 in April 2025).
There’s an additional consideration for company purchases specifically: residential property bought by a company for more than £500,000 attracts a flat 17% SDLT rate, regardless of the company’s structure — a rule specifically designed to discourage using corporate wrappers for higher-value residential purchases without a genuine trading rationale. This makes the maths on higher-value single purchases materially different from a portfolio of lower-value properties.
What limited company buy-to-let actually involves
- A Special Purpose Vehicle (SPV) — most lenders require the company to be a dedicated property SPV, not a trading company with mixed activities.
- Personal guarantees — even though the mortgage sits with the company, lenders will almost always require a personal guarantee from the directors.
- Slightly higher rates — limited company BTL products typically carry a modest rate premium over personal BTL, reflecting the additional underwriting and lender administration involved.
- Accountancy costs — company accounts, corporation tax returns, and potentially a second layer of tax on profit extraction (dividends) need to be factored into your real return, not just compared against gross rental yield.
When personal ownership still makes sense
- Basic-rate taxpayers with modest borrowing often see little or no benefit from incorporation, since the Section 24 restriction has far less impact at their tax band.
- Landlords planning to sell within a few years may find the incorporation costs (stamp duty on transfer, if moving existing properties into a company, plus potential CGT) outweigh the ongoing tax saving.
- Those wanting simplicity — personal ownership avoids company accounts, a second tax return, and the administrative overhead of running an SPV.
Moving existing personal properties into a company
This is worth flagging clearly: transferring a property you already own personally into a limited company is treated as a sale for tax purposes. That typically triggers both stamp duty (including the surcharge) and potential Capital Gains Tax on any increase in value since purchase. For an established portfolio, this cost needs modelling carefully against the ongoing tax saving — it is very rarely a straightforward “yes” without running the numbers for your specific circumstances.
Mortgage criteria: what’s changed
Lenders assess limited company BTL applications primarily on rental income coverage (typically requiring rent to cover 125–145% of the mortgage payment, depending on your tax status and the lender’s stress rate) rather than personal income in the way a residential mortgage is assessed. Portfolio landlords (four or more mortgaged properties) face additional lender scrutiny across the whole portfolio, not just the property being financed.
If you want the fuller picture of buy to let lending beyond the personal-vs-company decision — including HMOs, holiday lets and expat landlord criteria — see our complete buy to let mortgages guide.
Getting the structure right before you buy
Because incorporation decisions are hard and costly to reverse, this is a case where taking advice before you purchase — not after — makes a measurable financial difference. We work alongside your accountant or tax adviser where appropriate, and arrange the mortgage itself once the right structure for your circumstances is clear.
Building or restructuring a rental portfolio? Explore our buy-to-let mortgage service — including support for expat landlords — or request a call back.
Giles Finance is a trading style of Giles Finance & Consultancy Services, authorised and regulated by the Financial Conduct Authority (FRN 726857). Most buy-to-let mortgages are not regulated by the Financial Conduct Authority. This article is for general information only and does not constitute tax advice — please seek advice from a qualified tax adviser or accountant on your specific position. Your property may be repossessed if you do not keep up repayments on a mortgage secured against it.