More and more buy-to-let mortgages go to limited companies. For some landlords it's the right move; for others it's an expensive mistake.
How a property company is taxed
The company pays corporation tax on its profits, after deducting mortgage interest in full. If you take the profits out as dividends, you pay dividend tax on top: 10.75%, 35.75% or 39.35% from April 2026. Profits left in the company to reinvest are only taxed once.
Possible advantages
- Full deduction for mortgage interest, with no Section 24.
- Lower tax on profits kept in the business to grow the portfolio.
- More flexibility in how income is shared and passed on.
Possible drawbacks
- Double taxation when you take profits out.
- Company mortgages can have higher rates and fees.
- Moving existing properties in can trigger capital gains tax and stamp duty.
- More accounts, filings and costs every year.
Does it suit you? It depends on your income, plans and borrowing. See what moving could cost, or speak to a specialist.
Frequently asked questions
Is a limited company better for buy-to-let?
It depends. A company can deduct mortgage interest and pays corporation tax rather than income tax, but taking money out is taxed again, mortgages can cost more, and moving existing properties in can be expensive.
What tax does a property company pay?
Corporation tax on profits: 19% up to £50,000, 25% from £250,000, with marginal relief between. Owners then pay dividend tax on profits they take out.
Is it worth setting up a company for new purchases?
For some landlords buying new properties, especially higher-rate taxpayers planning to reinvest, a company can make sense. It's a decision to take with advice on your own figures.
Request a call back
Tell us a little about your situation and we'll call you, usually within one working day, to understand what you need. If it would help, we'll then put you in touch with a landlord tax specialist. We'll always tell you who they are before passing on your details. We don't give advice ourselves, and there's no obligation.