The short answer
Holding buy-to-let property in a limited company can be worthwhile for higher rate taxpayers who plan to build a portfolio and reinvest profits, because mortgage interest is fully deductible and profits are taxed at 19% to 25%. The trade-offs are higher stamp duty, higher mortgage rates, extra admin and a second layer of tax when you take profits out.
Checked 26 October 2026. Rates for 2026/27.Key facts
| Fact | Detail |
|---|---|
| Corporation Tax on rent | 19% to 25% |
| Mortgage interest | Fully deductible for companies |
| Individuals | Basic rate credit only (Section 24) |
| SDLT | Higher rates surcharge on extra homes applies |
| ATED | Annual charge on some homes over £500,000 |
What a property SPV is
A property special purpose vehicle, or SPV, is a limited company set up to hold investment property. The company buys, owns and rents out the properties, and pays Corporation Tax on its profits. The owner holds shares and may also be a director. The SPV structure keeps property investment separate from other business activity, and some lenders offer products specifically for such companies.
Interest in the structure grew after changes to how individual landlords are taxed. But it is not automatically better, and the answer depends on how many properties you hold, how you finance them and what you plan to do with the profits.
Section 24 and mortgage interest
For individual landlords, section 24 of the Finance Act 2015 restricts mortgage interest relief to a tax credit at the basic rate of 20%. A higher rate taxpayer therefore receives less relief than the 40% tax they pay on the rent, which can sharply reduce the net return on a leveraged property.
Companies are not affected by section 24. They deduct mortgage interest in full as a business expense and pay Corporation Tax on the profit. For a highly geared portfolio, that can be a significant saving, which is the main reason people consider a company.
Corporation Tax versus income tax
Rental profits in a company pay Corporation Tax at 19% on profits up to £50,000 and 25% on profits above £250,000, with marginal relief in between. An individual landlord pays income tax at 20%, 40% or 45%. At first sight, the company looks cheaper for higher rate taxpayers.
But when the company pays profits to you, they are taxed again as dividends. If you need the money to live on, the combined tax can be similar to or higher than the individual route. The structure works best when profits are retained and reinvested in more property, or when you have a long time horizon.
Stamp Duty and buying costs
Companies buying residential property pay Stamp Duty Land Tax at the higher rates, including the surcharge for additional dwellings. The surcharge was increased to 5% for purchases from 31 October 2024, and a 17% rate can apply to some company purchases above £500,000 unless a relief for property rental businesses applies. Check the rates, because they have changed recently.
If you move existing properties from your own name into a company, you face Capital Gains Tax on the gain and SDLT on the market value. That cost often outweighs the benefit, which is why many people use a company for new purchases only.
Mortgages and financing
Buy-to-let mortgages for limited companies are widely available, but the interest rates and fees are often higher than for individual landlords. Lenders usually require personal guarantees from the directors, which reduces the protection of limited liability. The choice of products is wide, though, and brokers specialising in SPV lending can help.
Compare the full cost of finance, including arrangement fees and rates, with the tax savings from the company structure. A cheaper tax position can be erased by more expensive borrowing.
Taking money out of the company
The tax cost of extracting profit is the main drawback. Dividends are taxed at 10.75%, 35.75% or 39.35% after the £500 allowance, on top of the Corporation Tax the company has already paid. A salary is possible if you do real work for the company, but rent is passive income, so it is not usually an allowable salary for a company with no active management.
A common approach is to retain profits in the company and reinvest them, or to extract only what you need at your lower tax bands. Directors’ loans, repaid from future profits, are another way to use the money, subject to the section 455 rules.
Admin, accounts and other costs
A property company needs annual accounts, a Corporation Tax return, a confirmation statement and bookkeeping. It must also keep a register of people with significant control, and, if the properties are high value, consider the Annual Tax on Enveloped Dwellings. Accountancy fees for a property company are usually higher than for an individual landlord.
Also consider that gains on sale of a property inside the company are taxed as part of company profits at Corporation Tax rates, with no annual exempt amount. These extra costs and rules mean that the structure needs scale to be worthwhile.
Who should and should not use a company
A limited company often suits landlords who are higher rate taxpayers, who plan to build a portfolio and reinvest profits, and who are buying new properties. It may not suit landlords who need the income to live on, who hold only one or two properties, or who would have to transfer existing properties with large gains.
Run the numbers for your own case, including tax, financing, SDLT and extraction costs, before you decide. An accountant can compare a company with personal ownership over a ten-year period.
Who an SPV suits best
A property company tends to suit investors who plan to build a portfolio, who do not need to draw all the rent as personal income and who are comfortable with a longer time horizon. Because mortgage interest is deductible against profit, and profits are taxed at corporation tax rates rather than personal rates, higher-rate taxpayers often benefit most. It is less attractive for someone with one property, who intends to sell soon, or who needs to take most of the rent out immediately, because extracting profit through dividends adds a second layer of tax. Run the numbers for your own situation before deciding.
Transferring existing properties into a company
Moving properties you already own into a company is treated as a sale at market value, which can trigger capital gains tax for you and stamp duty land tax for the company. There may be reliefs in limited cases, such as for a genuine property business, but they have strict conditions. Mortgages must also be refinanced, as lenders will not usually allow a transfer into a company on the existing loan. For these reasons, many investors use a company for new purchases rather than moving old ones. Get specialist advice before any transfer, because the costs can easily outweigh the benefits.
Running an SPV day to day
An SPV needs its own bank account, bookkeeping, annual accounts, a corporation tax return and a confirmation statement. Keep rent, deposits and repair costs in the company, and avoid paying personal expenses from it. Tenancy deposits must be protected and landlord obligations such as gas safety, electrical checks and licensing still apply. Directors loans are common because the owner often funds the deposit personally, so record them carefully and repay them when cash allows. Good records make mortgage renewals, sales and tax compliance much easier.
The bottom line
Holding buy-to-let property in a limited company can be worthwhile for higher rate taxpayers who plan to build a portfolio and reinvest profits, because mortgage interest is fully deductible and profits are taxed at 19% to 25%. If you would rather not do it alone, our fixed fees start at £45.83 + VAT a month.
Frequently asked questions
Is it better to buy a buy-to-let through a limited company?
It can be, for higher rate taxpayers who reinvest profits and use a lot of mortgage finance, because interest is fully deductible. It is less attractive if you need to withdraw all the profit.
What is Section 24?
It limits mortgage interest relief for individual landlords to a basic rate tax credit. It does not apply to companies, which deduct interest in full.
Can I transfer my existing properties into a company?
You can, but you may pay Capital Gains Tax and Stamp Duty Land Tax on the transfer, so the cost can outweigh the benefit.
How are property company profits taxed?
Corporation Tax at 19% to 25% in the company, then dividend tax if you take profits out as dividends.
Do I need an accountant for a property company?
Yes in practice. Accounts, tax returns, SDLT and extraction planning are specialist areas, and mistakes can be expensive.
Can I live in a property owned by my company?
It is possible but usually creates a benefit in kind tax charge and other complications, so it is rarely recommended. Take advice before allowing any director to occupy a company property.
Is rental income from a company subject to VAT?
Residential lettings are exempt from VAT, so the company cannot normally register or reclaim VAT on related costs. Commercial lettings may be different if the landlord opts to tax the property.
This article is general information, not personal tax or financial advice. Rules and rates change, so check GOV.UK or speak to an accountant about your circumstances. Rates shown are for 2026/27, last checked November 2026.