by Asim Abbas
11 November 2026 
Should you buy property through a limited company?
Should you buy property through a limited company?
More landlords than ever now buy property through a limited company, mainly because companies can still deduct mortgage interest in full.
- Companies deduct mortgage interest in full
- Profits pay Corporation Tax at 19% to 25%
- Taking money out means dividend tax as well
- Transferring existing properties can trigger CGT and Stamp Duty
But a company isn’t right for everyone. Getting money out costs tax, mortgages can be dearer and moving existing properties in can trigger big bills.
This guide sets out the pros and cons so you can decide whether a property company suits you.
Why landlords use companies
Individual landlords only get a 20% tax credit on mortgage interest. A company deducts interest in full before Corporation Tax. For higher rate taxpayers with large mortgages, that difference can be substantial.
A property makes £20,000 profit before £10,000 of interest. A higher rate individual pays 40% of £20,000 = £8,000, less a £2,000 credit, so £6,000. A company pays 19% of £10,000 = £1,900. But if the £8,100 left is paid out as dividends to a higher rate shareholder, a further £2,896 of dividend tax applies.
Corporation Tax calculator
Company tax on rental profit.
Advantages
- Mortgage interest fully deductible
- Corporation Tax of 19% on profits up to £50,000
- Profits left in the company can fund more purchases
- Shares can be passed to family for succession planning
- Limited liability
Disadvantages
- Dividend tax at 10.75% or 35.75% when you take money out
- Mortgage rates and fees are often higher
- Annual accounts, Corporation Tax returns and Companies House filings
- Properties worth over £500,000 may face the Annual Tax on Enveloped Dwellings unless a relief applies
- Gains on sale are taxed in the company, then again when extracted
Moving existing properties into a company
Transferring a property you already own is treated as a sale at market value. That can trigger Capital Gains Tax for you and Stamp Duty or Land Transaction Tax for the company, including higher rates for additional properties. Incorporation relief may defer CGT, but only where the letting activity is a genuine business. Take advice before doing this.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Who a company suits best
- Higher or additional rate taxpayers
- Landlords with significant mortgages
- Investors who plan to reinvest rather than draw income
- New purchases, rather than transferring existing ones
The planned property income rates of 22%, 42% and 47% from April 2027 apply to individuals, which may tip more landlords towards companies. Our tax planning, landlord and company formation teams can model your figures. See HMRC on ATED.
What should I do next?
As an individual landlord.
Including dividend tax on extraction.
Company buy-to-let rates and fees.
Frequently Asked Questions
Is a property company more tax efficient?
Often for higher rate taxpayers with large mortgages who reinvest profits. Less so if you need to draw all the income.
Can I transfer my existing properties to a company?
Yes, but it’s treated as a sale at market value, which can trigger CGT and Stamp Duty or Land Transaction Tax.
What is incorporation relief?
A relief that can defer CGT when a business is transferred to a company for shares. It only applies where letting is a genuine business.
Do property companies pay Corporation Tax on gains?
Yes. Gains are taxed at Corporation Tax rates, and further tax applies when profits are paid out.
Can Wingate set up a property company?
Yes. We form companies, register them with HMRC and handle accounts and tax every year.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Asim Abbas
I’m Asim Abbas, founder of Wingate Accountants and a Chartered Certified Accountant. I help sole traders, landlords and directors stay on top of their tax with fixed fees and plain-English advice.
