Over the past few years, one of the biggest shifts in the UK property market has been the rise of investors purchasing buy-to-let properties through limited companies rather than in their personal names. In 2025, this trend shows no signs of slowing, with more than half of new buy-to-let mortgages now written in company structures.

So why are investors making this move? The answer lies in tax efficiency, flexibility, and long-term planning.

1. Mortgage Interest Relief

Perhaps the most significant driver has been the changes to mortgage interest tax relief.

• Private landlords can no longer deduct their mortgage interest from rental income. Instead, they only receive a basic 20% tax credit, which hits higher and additional rate taxpayers hardest.

• Limited companies, however, can still treat mortgage interest as a deductible expense, reducing taxable profit in full.

For geared investors, this can make the difference between a profitable portfolio and one eroded by tax.

2. Lower Corporation Tax vs Higher Income Tax

Rental profits held within a limited company are taxed at corporation tax rates (currently 25%), rather than at personal income tax rates of up to 45%.

For higher-rate taxpayers, this creates significant savings. Investors can then choose when and how to extract profits—either as dividends, directors’ loans, or by reinvesting into further properties—giving far more flexibility than being taxed personally on all rental income.

3. Inheritance & Estate Planning Benefits

Holding property within a company structure also makes succession planning more straightforward. Instead of transferring physical property, investors can pass on shares in the company, often in a more tax-efficient way.

This opens up the ability to use trusts, family investment companies, or staged gifting of shares, which can help mitigate inheritance tax exposure.

4. Reinvestment Advantages

One of the overlooked benefits of company ownership is the ability to reinvest profits directly. Instead of paying higher personal tax and then reinvesting net income, investors can roll retained profits into further property acquisitions, accelerating portfolio growth.

5. Professional Image & Scalability

Operating via a company also signals a more professional approach. Many lenders, developers, and joint-venture partners prefer dealing with corporate structures, which are often seen as more credible and scalable. This can open up access to financing options and investment opportunities not always available to private landlords.

Points to Consider

While the benefits are compelling, there are also factors to weigh up:

• Higher mortgage rates: Buy-to-let mortgages for limited companies can carry slightly higher rates and fees.

• Set-up and admin costs: Company formation, accountancy, and annual filing obligations all add to running costs.

• Dividend taxation: Extracting profits as dividends still triggers personal tax (currently 8.75%–39.35%).

For many investors, though, the long-term tax advantages outweigh these costs, particularly for those building larger portfolios.

Final Thoughts

The shift towards limited company ownership reflects the way the buy-to-let landscape has changed. With mortgage interest relief stripped away for private landlords and higher-rate taxpayers facing heavier burdens, the company route has become the smarter, more sustainable option for serious investors.

For those planning to scale their portfolios, reinvest profits, or pass on wealth efficiently, buying through a limited company isn’t just a tax strategy, it’s become the new normal.