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Should You Buy Your Buy-to-Let Through a Limited Company?

Mon 17 Nov 2025

2025 has been a very volatile year for the Private Rental Sector; with the Renters Rights Bill making its way through parliament, and now with the new Act looming in May 2026, it is understandable that landlords have been putting more thought into their rental properties or portfolios.  The buy-to-let market is definitely becoming more complicated and fraught with red-tape, and tax rules are continuing to shift, so many landlords across England and Surrey are weighing up a key decision: “Should I purchase my next rental property in my personal name - or through a limited company?”.

According to Q3 2025 research from mortgage lender Foundation Home Loans, 22% of landlords now hold at least one property within a limited company, up 2% from the previous quarter. Even more striking is the fact that 75% of those planning to buy in the next year intend to do so through a company. So is this the right route for you? Let’s take a look at those options in this blog:

Why More Landlords Are Choosing Limited Companies

1. Tax Efficiency

One of the biggest drivers for the shift to buying in a Limited Company is tax. Buying this way enables landlords to deduct 100% of their mortgage interest as a business expense, this is something that’s no longer available for individual landlords since the removal of full tax relief under Section 24. Instead, individuals now receive a basic-rate tax credit, you can read about that here.

In contrast, limited companies pay corporation tax on profits at 25%, which can be significantly lower than the 40% or 45% personal tax rate that many landlords face. For higher earners, this can translate into substantial savings.

2. Capital Recycling

Professional landlords, especially those with multiple properties, often use capital recycling strategies, such as remortgaging to release equity and fund new purchases. Owning via a company allows for greater financial flexibility, often with fewer limitations on how equity can be redeployed.

Some lenders also provide specialist buy-to-let loans tailored to limited companies and portfolios, offering attractive fixed terms or interest-only options that align with long-term investment goals.

3. Legacy & Inheritance Planning

Structuring a portfolio through a limited company can provide more control when it comes to succession planning. Instead of selling properties, you could pass down shares in the company - potentially minimising inheritance tax and easing the administrative burden on your heirs.

4. Professionalism & Compliance

The recent passage of the Renters’ Rights Bill has introduced new responsibilities for landlords, from greater tenant protections to stricter licensing. Incorporation is becoming a hallmark of a "professional landlord", with many choosing this route to reflect the way they run their portfolio - as a business, not a sideline.

What to Consider Before You Incorporate

While the benefits are compelling, limited company ownership isn’t for everyone. There are several potential drawbacks:

  • Higher Mortgage Rates & Fees
    Company buy-to-let mortgages often carry higher interest rates and setup fees. While the gap is narrowing, these costs can still eat into your returns if you're not careful.

  • Running Costs & Admin
    You’ll need to file annual accounts with Companies House, keep detailed financial records, and may face higher accountant fees. Even with just one or two properties, this can be a burden if you're not financially confident.

  • Dividend Tax on Withdrawals
    Profits taken out of the company as dividends are subject to dividend tax - currently 8.75% for basic rate taxpayers and up to 33.75% for higher rate taxpayers. This can impact your overall tax position depending on how much income you take from the business.

  • Transferring Existing Properties
    If you already own buy-to-let properties in your name and want to move them into a limited company, HMRC treats this as a sale. This means you may face Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT) - costs that could outweigh the benefits unless handled carefully

Local Insight: What We're Seeing in Surrey

In the areas we serve - Bookham, Send, Cobham, Dorking, East Horsley, Ripley, Effingham, Woking - we’re seeing a definite shift in mindset among property investors. Landlords are becoming more strategic, treating their portfolios like businesses and planning for the long term.

Many of our clients are speaking with accountants and brokers to fully understand their options, particularly if they’re thinking of expanding or refinancing.

Watch This Space: Autumn Statement 2025

If you're weighing up whether to buy in your name or through a company, keep an eye on the Chancellor’s Autumn Statement on 26th November. There are strong signals that new tax measures could impact both individual landlords and those with properties in limited companies.

Among the possibilities:

  • A new National Insurance charge on rental income for individuals

  • Changes to Capital Gains Tax rates or thresholds

  • Adjustments to mortgage interest relief or corporation tax rules for company-owned portfolios

With these potential reforms on the horizon, it’s even more important to take tax and financial advice before your next property move. Strategic planning now could protect your returns later.

Speak to the Experts

At Wills & Smerdon, we’re proud to support Surrey’s property investors with clear, honest guidance. Whether you’re a first-time landlord or building a professional portfolio, we’ll connect you with experienced mortgage and tax advisers to ensure your strategy is future-proof.

Thinking of expanding your portfolio or buying your first rental? Speak with our experienced lettings team. We’ll connect you with trusted mortgage and tax professionals to help guide your decision.

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