Should I Use a Limited Company for a Rental Property?
When turning your home into a rental or buying a property to let, one of the biggest questions landlords face is whether to hold the property in their own name or through a limited company.
Both routes can work, but the right choice depends on your circumstances, your tax position, and your long-term goals.
In this blog, we explore the pros and cons of using a limited company for rental property ownership.
Why Consider a Limited Company?
For higher-rate taxpayers, one of the main concerns with rental property is the income tax on profits which is paid at the higher rate.
A limited company could offer a more tax-efficient structure.
- Corporation tax is currently 19% on profits below £50,000.
- Profits retained within the company are taxed at this lower rate, rather than at personal income tax levels.
- Mortgage interest can generally be offset against rental income, which is no longer available in full to individual landlords.
For landlords planning to grow a portfolio or treat the property as a long-term investment asset, this structure can provide a meaningful saving.
What Are the Downsides?
Running a property through a company isn’t without additional costs and complexities:
- Mortgage rates for limited company buy to lets are usually slightly higher.
- You’ll need to pay accountancy fees for annual filings and compliance.
- If you transfer an existing property into a company, it is treated as a sale, meaning:
- Stamp duty is payable.
- A new mortgage needs to be arranged.
- Stamp duty is payable.
- If you take profits out of the company for personal use, personal tax may still apply (e.g., via dividends).
How It Works in Practice
In a recent case, a client was considering letting out their current home rather than selling it.
With a property value of around £320,000 and an outstanding mortgage of £170,000, moving to a buy to let mortgage could release £70,000 of equity.
The concern was how to manage the tax on rental profits. By holding the property in a company:
- Corporation tax of 19% would apply to profits left in the business.
- Interest costs on the mortgage could be offset.
- Long-term ownership was possible without immediately drawing profits personally
The trade-off was slightly higher mortgage rates and the need for professional accountancy support.
Is It Always the Best Option?
Not necessarily. For some, especially basic-rate taxpayers or those only planning to rent a property for a short time, keeping the property in their personal name can be simpler and more cost-effective.
For others in higher tax bands, or those who want to build a portfolio, a limited company could deliver greater efficiency over the long term.
It’s important to speak with a suitably qualified Accountant, Tax Planner and Financial Adviser to make an informed decision on how best to proceed.
Final Thoughts
Using a limited company for a rental property can be a smart move—but it’s not right for everyone.
The decision comes down to how long you plan to keep the property, your tax position, and whether you want to grow your rental portfolio.
As this decision has both tax and mortgage implications, it’s important to seek advice. Speaking to a mortgage adviser alongside an accountant will help you weigh up the costs, risks, and benefits to make sure the choice aligns with your long-term plans.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances.
Symmonds de Lacey is a trading style of Easy Street Financial Services Ltd, which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales. Company number 6430453. Registered address: Basepoint, 377-399 London Road, Camberley, Surrey, GU15 3HL.
We are not tax advisers. For tax advice, please speak to your accountant or a qualified tax adviser.
Information correct at time of writing – June 2026
