The Pros and Cons of Owning Buy-to-Lets Through a Company
New figures show there are over 401,000 buy-to-let companies* in the UK – more than any other type of business. Let’s look at what landlords need to know about owning their property through a limited company.

- Limited companies may reclaim the full amount of mortgage interest paid as an expense against tax. In comparison, a tax rule known as Section 24 means individual landlords may not reclaim interest paid beyond a 20% tax credit.
- Owners of limited companies may be able to withdraw money from the company more tax-efficiently than individuals.
- Limited companies pay lower rates of corporation tax on their profits (either 19% or 25%). Landlords who are higher or additional rate income taxpayers pay 40% and 45% respectively.
- Other possible advantages include the protection of limited liability, and the ability to bring investors into the company and transfer property to others by selling or transferring the limited company.
- It may be more difficult to raise mortgage finance via a limited company. Fewer lenders are active in this market, and interest rates and fees may be higher.
- Directors may be required to give a personal guarantee for their company’s borrowing.
- Setting up and running a limited company includes extra record-keeping and administrative expenses. Limited companies must prepare and file annual accounts with Companies House.