Should You Put Your Buy-to-Let
in a Limited Company?

Since mortgage interest relief was restricted, more landlords have asked whether they should hold property through a limited company rather than in their own name. For some it saves significant tax; for others it adds cost and complexity for little benefit. This guide explains the trade-offs so you can have a well-informed conversation with your accountant.

This is general information, not personal tax advice. Incorporation is a major decision with legal and tax consequences, so always take professional advice on your own situation before acting.

Why this became a question: Section 24

The trigger is the restriction of mortgage interest relief, often called Section 24. Since 2020/21, individual landlords can no longer deduct mortgage interest from rental income before tax. Instead they receive only a 20% basic-rate tax credit. For higher-rate taxpayers with mortgaged property, this can dramatically increase the effective tax on rental profit. Companies are not subject to Section 24, so they can still deduct mortgage interest as a business expense, which is the heart of the appeal.

The case for a limited company

• Full interest deductibility. A company deducts mortgage interest in full before paying corporation tax, unlike an individual landlord.
• Potentially lower tax on retained profit. Corporation tax on retained profits can be lower than higher-rate income tax, which suits landlords reinvesting rather than drawing the income.
• Easier succession planning. Shares can be structured and passed on more flexibly than property held personally.

The case against, or the catches

• Getting money out is taxed again. Profits taxed in the company are taxed a second time when you extract them as dividends or salary. If you need the rental income to live on, the headline company saving can shrink or disappear.
• Mortgages can cost more. Limited company buy-to-let mortgages often carry higher rates and fees, and there are fewer lenders.
• Moving existing property in is expensive. Transferring a personally owned property into a company is a sale in the eyes of the law. It can trigger capital gains tax and a 5% stamp duty surcharge on the market value, which can wipe out years of tax savings.
• More admin. A company means annual accounts, corporation tax returns, Companies House filings and usually higher accountancy fees.

Incorporation is a tool, not a default.

Who does it tend to suit?

As a general pattern, a limited company more often makes sense for higher-rate taxpayers building a larger, mortgaged portfolio who intend to reinvest profits rather than draw them. It less often makes sense for a landlord with one or two properties, a basic-rate taxpayer, or someone who needs the rental income as day-to-day earnings. And for property you already own personally, the cost of transferring it in is frequently the deciding factor against.

Whichever structure you choose, the fundamentals still matter. Our guide to gross yield versus net position shows why the underlying numbers, not just the wrapper, drive returns, and our piece on whether buy-to-let is worth it in 2026 puts it in context.

The takeaway

Incorporation is a tool, not a default. The right answer depends on your tax band, whether you draw or reinvest the income, the size and financing of your portfolio, and the cost of moving existing property. Model it properly with an accountant before you act. If you work with an adviser, our page for accountants explains how PROXERA supports the numbers behind these decisions.

Frequently Asked Questions

Is it better to own buy-to-let through a limited company?

It depends on your circumstances. A company can deduct mortgage interest in full and may pay lower tax on retained profit, which suits higher-rate landlords reinvesting income. But extracting profit is taxed again, company mortgages can cost more, and moving existing property in can trigger capital gains tax and stamp duty. Take accountancy advice.

What is Section 24 and why does it matter?

Section 24 is the restriction that stops individual landlords deducting mortgage interest from rental income before tax; they get only a 20% basic-rate tax credit instead. It can sharply increase the effective tax for higher-rate landlords, which is the main reason some consider a limited company, as companies are not subject to it.

Can I move my existing rental property into a company?

You can, but it is treated as a sale at market value, which can trigger capital gains tax and the 5% stamp duty surcharge on additional dwellings. These costs often outweigh the tax savings for an existing property, so it is essential to model it with an accountant first.