Buying property through a limited company

Why landlords use a company

Some landlords buy rental property through a limited company instead of in their own names. Often this is a special purpose vehicle, or SPV, a company set up only to own and let property. The company is the legal owner, borrows the money and receives the rent, while you control it as a director and shareholder.

The usual reasons are tax and planning. Individual landlords can no longer deduct mortgage interest from rental profits and instead get a basic-rate tax reduction, while a company pays corporation tax on its profits after costs. A company can also make it easier to keep profits in the business or to pass shares to family over time.

It does not suit everyone. Money you take out as salary or dividends can be taxed again, company mortgages can cost more and there are accounts to file every year. Take advice from an accountant or tax adviser before you set up a company or make an offer.

Set up the company first

The company must exist, and be named as the buyer, before contracts are exchanged, because the contract and the mortgage will be in its name. Exchange of contracts is the point where the purchase becomes legally binding, and changing the buyer afterwards is rarely straightforward.

Lenders offering company buy-to-let mortgages commonly prefer an SPV whose only business is property, shown by the activity codes chosen when it is registered at Companies House. They also look closely at the directors and shareholders, so agree the structure with your adviser and mortgage broker before you incorporate.

Since 18 November 2025, anyone becoming a director, and anyone who is a person with significant control (broadly, someone owning or controlling more than 25% of the company), must verify their identity with Companies House. Directors already in post were given a 12-month transition, confirming verification when the company files its next confirmation statement, the yearly check of its details at Companies House. The rules come from the Economic Crime and Corporate Transparency Act 2023, and GOV.UK explains how to verify.

Stamp Duty Land Tax for companies

Companies buying homes in England and Northern Ireland usually pay the higher rates of Stamp Duty Land Tax (SDLT), which add 5 percentage points to every band. This applies to any residential purchase of £40,000 or more, even the company's first, and companies cannot claim first-time buyer relief. For example, a company buying a £200,000 flat would pay 5% on the first £125,000 (£6,250) and 7% on the remaining £75,000 (£5,250), a total of £11,500.

Above £500,000, a flat rate of 17% of the whole price can apply. Reliefs are available, including for a property rental business letting on commercial terms, and the higher rates then apply instead: on a £600,000 flat, that is £50,000 rather than £102,000. The relief can be withdrawn if, within three years, someone connected with the company, such as a controlling shareholder or their relative, is allowed to live there, even paying full rent. GOV.UK's guidance on corporate bodies has the detail.

A further 2% applies to non-UK resident buyers, which can include some companies with overseas owners. In Wales, companies pay the higher residential rates of Land Transaction Tax.

Mortgages and personal guarantees

Company buy-to-let lending is a specialist market, so a broker who arranges it regularly can help. The lender looks at the rent the property will earn as well as at the company and the people behind it.

Lenders commonly ask each director, and sometimes the main shareholders, for a personal guarantee. This is a promise that if the company cannot repay, the lender can pursue you personally. Some lenders require guarantors to take independent legal advice first, which is a separate cost.

Where the lender instructs its own solicitor instead of letting your conveyancer act for both, you usually pay that firm's costs too. After completion, the mortgage, known as a charge, should be registered at Companies House within 21 days as well as at HM Land Registry, because registering late needs a court order. Your conveyancer or the lender's solicitor normally does this, but check who.

The Annual Tax on Enveloped Dwellings

A company that owns a home worth more than £500,000 falls within the Annual Tax on Enveloped Dwellings (ATED), a yearly charge on residential property held by companies. For 1 April 2026 to 31 March 2027, it starts at £4,600 for a property worth up to £1 million and rises with value. The Budget on 28 October 2026 set a rise of 3.5% from 1 April 2027.

Relief is available for property let on a commercial basis to people unconnected with the company, but the company must still file a return to claim it. Returns are normally due by 30 April for the year, or within 30 days of buying a property later in the year. A company with a £650,000 flat let to unrelated tenants would file a relief declaration return and pay nothing, but would owe the charge if the owner's family lived there. GOV.UK covers the basics.

Moving a property you already own into a company

Transferring a property you own personally into your company counts as a sale, even if no money changes hands. Because you are connected with the company, the tax is normally based on the property's full market value:

• the company usually pays SDLT at the higher rates on that value
• you may pay Capital Gains Tax on the rise in value since you bought it
• your existing mortgage normally has to be repaid and replaced with a company mortgage, which can mean early repayment charges

For example, if you bought a flat for £150,000 and it is now worth £230,000, Capital Gains Tax would be worked out on a gain of £80,000 before costs and allowances, and the company would pay £13,600 in SDLT even if it paid you nothing. Reliefs can help in limited cases, such as some partnerships or where the letting amounts to a genuine business, but they turn on detailed facts. Get specialist tax advice before you commit.

Checklist: documents your conveyancer will need

Company purchases need more paperwork than personal ones. Have these ready when you instruct the firm:

• the certificate of incorporation and the articles of association, the company's rulebook
• details of the directors, shareholders and people with significant control, matching the Companies House record
• confirmation that each director has verified their identity with Companies House
• photo identification and proof of address for each director, guarantor and anyone owning more than 25% of the shares
• a board resolution, a written decision of the directors, approving the purchase and mortgage and naming who will sign
• evidence of where the money comes from, such as company bank statements and any loan agreement if you are lending to the company
• the mortgage offer in the company's name and any guarantee documents

Your conveyancer checks that the company can buy and borrow, that the right people sign and that the identity checks are complete. They then deal with the contract, the mortgage, the SDLT return and registration. You and your accountant look after the company's accounts, tax returns and any ATED returns.

Next steps

When you get a buy-to-let quote from Keyfolio, tick the option for buying through a company. Any company admin fee then shows as its own line. Because special rates and reliefs can apply, the quote leaves the property tax for the law firm to calculate, and the firm confirms its quote in writing before you instruct it.

Buying several properties at once? See the portfolio purchase service, and our landlords page for the wider picture.