Limited company buy-to-let, explained

Structures

A limited company buy-to-let is exactly what it sounds like: the property is bought and mortgaged by a company you own, rather than by you personally. It has become the default conversation in UK buy-to-let — and it is genuinely better for some landlords and genuinely worse for others.

Written by Scott West, a practising specialist mortgage broker · Updated 11 Aug 2026

What a limited company buy-to-let actually is

Instead of your name going on the title and the mortgage, a limited company's does. Most landlords use a special purpose vehicle (SPV) — a company set up to do nothing except hold and let property, usually registered under the SIC codes lenders look for (68100 and 68209 are the common ones). The company owns the property, receives the rent, pays the mortgage and other costs, and pays corporation tax on the profit. You own the company's shares, and you take money out as salary, dividends, or repayment of money you lent the company.

That last sentence carries most of the substance. Personally owned rental profit lands on your own tax return in the year it arises, whether you spend it or not. A company's profit sits inside the company until you choose to extract it — and extraction is a taxable event of its own. Everything that makes company ownership attractive or unattractive flows from that separation.

Why it took off: Section 24, in plain terms

Before 2017, an individual landlord could deduct mortgage interest in full before working out taxable rental profit. Section 24 of the Finance (No. 2) Act 2015 — the “mortgage interest restriction” — phased that out between April 2017 and April 2020. An individual landlord now gets no deduction for finance costs at all; instead they receive a tax credit at the basic rate (20%) on those costs.

The arithmetic bites hardest on higher-rate taxpayers with meaningful debt: they are taxed on rental income they never kept, because most of it went to the lender. Companies were left outside Section 24 entirely — a company still deducts its mortgage interest as an ordinary business expense before tax, as it always has. That single asymmetry is why the phrase “limited company buy to let” is now searched more often than almost anything else in landlord finance.

How the numbers differ, mechanically

• Interest. Deductible in full for a company; restricted to a 20% credit for an individual.
• Tax on the profit. A company pays corporation tax — for 2026/27 that is 19% on profits up to £50,000 and 25% above £250,000, with marginal relief between the two. An individual pays income tax at their own rates on rental profit.
• Taking money out. Salary and dividends from the company are taxed on you personally on top of the corporation tax already paid. A landlord who needs to live on the rent extracts constantly; a landlord reinvesting inside the company may extract little or nothing for years. The same structure produces very different outcomes for those two people.
• Buying costs. Companies pay the higher rates of Stamp Duty Land Tax on residential purchases in England and Northern Ireland — the additional-dwellings surcharge has been 5 percentage points above the standard rates since 31 October 2024 (Scotland and Wales run their own, different surcharges), and a company purchase over £500,000 can fall into a special corporate flat rate unless a relief applies — genuine rental businesses commonly qualify, but it is a point to confirm, not assume. The stamp duty calculator prices a company purchase band by band.

What a limited company mortgage involves

Company buy-to-let is a mainstream, well-served part of the specialist mortgage market, but it is underwritten differently from a personal BTL. Expect the lender to ask for personal guarantees from the directors — the company borrows, but you stand behind it. Expect the application to be assessed on both the company and the people behind it. Product ranges, fees and criteria differ from the personal equivalents, and not every lender operates in both markets, which is why this corner of lending is usually broker-arranged rather than walk-in.

One practical difference worth knowing: lenders' rental stress tests often treat company applications differently from personal higher-rate-taxpayer applications, because the tax treatment of the interest differs — the buy-to-let mortgage calculator shows the 125%-versus-145% spread on your own figures. The mechanics of those tests are covered in our guide to how a buy-to-let remortgage works.

The running costs people forget

A company is a real legal entity with real obligations: annual accounts filed at Companies House, a corporation tax return, a confirmation statement, a registered office, and bookkeeping that can survive an enquiry. Most landlords pay an accountant to handle this, and that fee recurs every year, per company. None of it is ruinous — but on a single low-yield property the admin can eat a meaningful slice of the tax saving, which is why the structure tends to make more sense the more properties, debt and profit sit inside it.

Record-keeping also gets more formal. Money you put in and take out is no longer just your money moving between your own accounts — it is a director's loan, a dividend, or salary, and each needs recording properly. Landlords running personal holdings, companies and trusts side by side face the extra problem of keeping each entity's figures separate while still seeing the whole position — Primehold keeps each entity as its own portfolio with every figure's dated history, and totals them into one view.

Moving existing properties into a company

This is the step that surprises people. You cannot simply “transfer” a personally owned property into your company: legally it is a sale by you and a purchase by the company, at market value, between connected parties. That normally means capital gains tax on any gain you have made since purchase, stamp duty (including the surcharge) paid again by the company, a full conveyance, and a new mortgage — your existing loan does not follow the property across. In some circumstances reliefs can change this picture, particularly where a genuine property partnership incorporates, but the bar for those reliefs is real and fact-specific.

The pattern in practice

Brokers see the same shape again and again. Higher-rate taxpayers buying with meaningful gearing, planning to hold long-term and reinvest profits, tend to find the company sums attractive. Basic-rate taxpayers, landlords with little or no mortgage debt, and owners who need to spend the rental income personally each month often find the picture much closer — sometimes the company route costs more once extraction and running costs are counted. And nobody's spreadsheet survives contact with their actual circumstances: pension position, other income, spouses' tax bands and inheritance plans all move the answer.