How to Set Up a Buy-to-Let Company in the UK
Setting up a Buy-to-Let company has gone from a niche tax strategy to the default choice for serious property investors. In 2025 alone, 66,587 new Buy-to-Let limited companies were registered with Companies House. And with 5,922 new landlord companies already recorded in January 2026, up 11% on the same month in 2025, the trend shows no sign of slowing.
The catalyst was Section 24 of the Finance (No. 2) Act 2015, which stripped individual landlords of full mortgage interest relief (but limited companies were exempt). This made incorporation the preferred move for higher-rate taxpayers running leveraged portfolios.
Then, in the Autumn Budget 2025, came the announcement that income tax on property income will rise by two percentage points at every rate band from April 2027. This made the individual landlord tax position worse and is further pushing people towards forming a Buy-to-Ket companies.
In this context, we present to you this guide that explains exactly how to set up a Buy-to-Let company in the UK, what structure to use, the step-by-step registration process, and how to decide whether it makes financial sense for your situation.
What Kind of Buy-to-Let Company Do You Need?
Most landlords setting up a Buy-to-Let limited company do not use a standard trading company. They use a Special Purpose Vehicle (SPV), i.e., a private limited company created solely to buy, hold, and rent residential property.
This distinction matters enormously when it comes to mortgages. Buy-to-Let lenders do not like lending to trading businesses for property purposes because the mix of income streams and liabilities makes affordability harder to assess. SPVs are clean, single-purpose entities, and most specialist lenders will only offer a limited company buy to let mortgage to one.
When you register an SPV, the standard SIC codes are:
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68100
Buying and selling of own real estate
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68209
Other letting and operating of own or leased real estate
Use 68100 if you plan to buy and eventually sell properties, or 68209 if you are purely a letting landlord. Some landlords register both.
There are over 443,000 Buy-to-Let limited companies registered at Companies House in the UK — a figure that has grown nearly fivefold since 2016. This is not a fringe structure, it is mainstream.
What Kind of Buy-to-Let Company Do You Need?
If you already run a limited company for an unrelated business, you might wonder whether you can simply buy property through it. But this would create problems.
Lenders will not typically offer a Buy-to-Let mortgage to a trading company. They want the property-holding vehicle to be ring-fenced from other business activity, with no mixed income or liabilities to unpick. So even if you already have a limited company, you will almost certainly need to incorporate a separate SPV for property investment.
The alternative sometimes considered is a Limited Liability Partnership (LLP). LLPs are occasionally used for family property structures because they allow more flexible profit-sharing arrangements. However, LLPs do not qualify for the same mortgage products as SPVs, and most Buy-to-Let lenders will not lend to them. For most investors, a private limited company is the right structure.
Step-by-Step: How to Set Up a Buy-to-Let Company
Many lenders cap the number of directors or shareholders they will accept (commonly at four) and require personal guarantees from directors and any shareholders above a specified ownership threshold. This is standard — the limited liability protection of a company structure does not prevent lenders from requiring personal guarantees on property mortgages.
Family members are commonly added as shareholders for income-splitting purposes (for example, by distributing dividends to a spouse in a lower tax bracket). This can be a significant planning tool but get tax advice before you set up the share structure, because changing it later is complicated.
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Your chosen company
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Registered office address
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Director details (name, date of birth, nationality, address)
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Shareholder details and share structure
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SIC code
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Details of any Persons with Significant Control (PSC), i.e., anyone holding more than 25% of shares or voting rights
Once registered, you will receive a Certificate of Incorporation with your company number. Keep this safe as you will need it for your mortgage application.
Mandatory Identity Verification
Since 18 November 2025, Companies House requires all new directors and PSCs to complete identity verification when forming a company. This is a fraud-prevention measure introduced under the Economic Crime and Corporate Transparency Act 2023. You can verify through GOV.UK One Login or through an Authorised Corporate Service Provider (ACSP).
The Tax Case for Setting Up a Buy-to-Let Company
Section 24 & Mortgage Interest Relief
This is the main reason landlords incorporate. Under Section 24, individual landlords can not deduct mortgage interest from rental income when calculating taxable profit. Instead, they receive a 20% basic-rate tax credit on their finance costs.
This can create a considerable tax burden, particularly for higher-rate or additional-rate taxpayers, a burden that SPVs minimise.
Here’s an example of exactly how much tax an SPV can save.
Just look at the difference!
An SPV only has to pay corporation tax on £8,000 of profit because it deducts the full mortgage interest. The individual pays income tax on £20,000 because they cannot.
Looking Ahead
The Autumn Budget 2025 confirmed that income tax on property income for individuals will rise by two percentage points from 6 April 2027. The basic rate on property income increases from 20% to 22%, the higher rate from 40% to 42%, and the additional rate from 45% to 47%.
Alongside this, the Section 24 tax credit for individual landlords will also change. Instead of the current 20% basic-rate credit on finance costs, it will be given at the new property basic rate of 22% from April 2027. Both changes increase the tax cost of holding property personally. The case for incorporating a new Buy-to-Let has therefore become stronger.
Corporation Tax Rates
Corporation tax in the UK has the following rates for the tax year 2026/27:
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Small Profits Rate
19% on profits up to £50,000
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Main Rate
25% on profits above £250,000
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Marginal Relief
Provided for amounts between £50,000 and £250,000, creating an effective marginal rate of 26.5% in this band
For most small to medium-sized property portfolios generating under £50,000 in annual profit, the corporation tax rate is 19%. This is lower than the 40% faced by higher-rate individual taxpayers today, and lower still than the 42% that will apply to their property income from April 2027.
Furthermore, these thresholds are divided proportionally between associated companies. This means that if you operate multiple SPVs, the lower rate thresholds will apply across all of them combined.
To keep this manageable, it is worth considering the right shareholding structure from the outset.
Extracting Money from the Company
The corporation tax saving is not entirely free money, because you pay additional tax when you take profits out of the company. However, there are some ways you can take money out of your SPV in a tax-efficient manner.
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Salary
A low director's salary (typically up to the National Insurance primary threshold of £12,570 in 2026/27) is tax-efficient. It is deductible against corporation tax and falls below the income tax threshold.
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Dividends
Dividend tax rates are presently at 10.75% (basic rate), 35.75% (higher rate), and 39.35% (additional rate), above the £500 dividend allowance. Dividends are paid from post-tax profits and are not deductible against corporation tax.
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Director's Loan Repayment
Any money you lent to the company to fund a deposit or initial costs can be repaid to you tax-free, up to the amount originally loaned. This is often an underused but valuable tool for early-stage portfolio building.
The combined effective rate of corporation tax plus dividend tax is typically 40% to 50% for a higher-rate taxpayer who extracts all profits immediately. For landlords who retain profits in the company to reinvest, the effective rate is just the corporation tax rate, i.e., 19% for smaller portfolios.
Where the company structure wins most clearly is when you retain profits within the company to reinvest. If you are building a portfolio and using rental income to fund further deposits, the money that stays inside the company is only taxed once (at the corporation tax rate), rather than being extracted and taxed again as dividend income.
Capital Gains Tax
When an individual sells a Buy-to-Let property, they pay CGT at 18% (basic-rate band) or 24% (higher-rate band) on the gain, after their annual exempt amount (£3,000 for 2026/27). For a company, there is no CGT annual exemption. Instead, the gain is taxed as part of the company’s profits at corporation tax rates.
For landlords planning to sell, this creates complexity. However, one advantage of the company structure is that you can sell the shares in the SPV rather than the property itself. A buyer taking on the shares avoids Stamp Duty Land Tax on the property purchase, which can make the deal more attractive and potentially allow you to negotiate a better price.
The Tax Case for Setting Up a Buy-to-Let Company
Standard residential mortgage lenders do not offer products to limited companies. You will need a specialist Buy-to-Let lender, and even then, the product range is narrower than for individual borrowers.
Key Points to Be Aware of
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Higher Rates & Fees
Company Buy-to-Let mortgages typically carry slightly higher interest rates and arrangement fees than equivalent personal mortgages, reflecting the perceived complexity of lending to a company.
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Personal Guarantees Are Standard
Almost all lenders will require director-shareholders to sign personal guarantees, which means your personal assets remain exposed if the company defaults. The limited liability structure does not insulate you here.
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Stress Tests Still Apply
Rental income must cover the mortgage payment at a stressed interest rate, typically at 125% to 145% of the notional rate, depending on the lender.
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Lenders Prefer Established Companies
Some lenders will not lend to a newly incorporated SPV and want to see that the company has been active for at least a period. Check lender criteria before registering.
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Director & Shareholder Limts
Many lenders cap the number of directors or shareholders they will accept — commonly at four — and will require personal guarantees from directors and any shareholders above a specified ownership threshold (typically 20% to 25%). Criteria vary by lender, so check before you structure your company.
Mainstream high-street banks tend to prefer individual borrowers. The strongest selection of company Buy-to-Let company products comes from specialist lenders like Paragon, Fleet Mortgages, The Mortgage Works, and Foundation Home Loans. A mortgage broker who specialises in portfolio landlords is useful here, as they will know which lenders are currently most competitive for SPV applications.
Ongoing Compliance Requirements
Running a Buy-to-Let company is not just a one-off registration exercise. There are ongoing filing and administrative obligations:
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Annual Accounts
Filed with Companies House each year, within nine months of your accounting period end.
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Confirmation Statement
An annual Companies House filing confirming the company's current registered details. This costs £50 per year for digital filing, following the February 2026 fee increase.
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Corporation Tax Return (CT600)
Filed with HMRC within 12 months of the accounting period end. Corporation tax itself is due nine months and one day after the period ends.
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Self Assessment Tax Return
Directors will still need to file personal self assessment returns to account for any salary and dividend income received from the company.
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Making Tax Digital (MTD)
MTD for Income Tax applies to individuals (sole traders and landlords), not to limited companies. An SPV pays corporation tax, not income tax, and falls outside the scope of MTD for Income Tax. However, if you personally hold any properties outside the company and your qualifying gross income from property and/or self-employment exceeds £50,000 (based on your 2024/25 tax return), you are required to comply with MTD from 6 April 2026. The threshold drops to £30,000 from April 2027 and £20,000 from April 2028.
Most landlords use an accountant who specialises in property companies to handle the company’s ongoing compliance.
The Renters Rights Act 2025: Additional Requirements Placed on Company Landlords
The first phase of the Renters Rights Act 2025 came into force across England on 1 May 2026. This is the most significant change to private rented sector legislation in more than 30 years, and it applies equally to properties held in a company structure as to those held personally.
The key changes now in force are:
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Section 21 "No-Fault" Evictions Are Abolished
Landlords can no longer evict tenants without a valid legal ground. All possession claims must now use Section 8, citing one of the statutory grounds under the Act.
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All Tendancies Are Now Periodic
Fixed-term assured tenancies can no longer be created. All new tenancies are rolling periodic contracts from the outset. Existing tenancies also converted to the new regime on 1 May 2026.
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Rent Increases Are Restricted to Once Per Year
Also, all rent increases must happen via a formal Section 13 notice with two months' notice.
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No More Than One Month's Rent In Advance
Landlords cannot demand more from tenants.
For company landlords, this changes how you need to think about possession and vacancy. The absence of Section 21 means evictions will generally take longer and require court proceedings. Effective tenant vetting and sound management practices are now more important than ever.
Phase 2 of the Renters’ Rights Act, covering the new Private Rented Sector Landlord Ombudsman and mandatory registration database, is expected to roll out from late 2026 onwards.
Transferring an Existing Portfolio into a Company
If you already own Buy-to-Let properties in your personal name and want to move them into a company structure, the process is expensive and tax-heavy. It is not a simple transfer.
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Stamp Duty Land Tax
Transferring property to a connected company is treated as a sale at market value for SDLT purposes. The 5% additional dwelling surcharge (in force since 31 October 2024) applies on top of the standard SDLT rates. The standard nil-rate band reverted to £125,000 from April 2025, compounding acquisition costs further. On a portfolio worth £800,000, the total SDLT bill could easily exceed £50,000.
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Capital Gains Tax
The transfer is a disposal at market value for CGT purposes. Gains accrued since purchase are taxable in the year of transfer, at 18% (basic-rate band) or 24% (higher-rate band).
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Incorporation Relief
Landlords who can demonstrate that their property letting amounts to a genuine business (rather than passive investment) and who spend significant time managing it may qualify for incorporation relief, which defers the CGT charge. The criteria are strict and contested, and you should take specialist tax advice before relying on it.
For most landlords with existing personal portfolios, the costs of transferring outweigh the ongoing tax savings for most holding periods. The more common approach is to hold existing properties personally and buy new additions through the SPV.
Is Setting Up a Buy-to-Let Company Right for You?
Incorporation makes the most sense if:
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You are a higher-rate or additional-rate taxpayer and plan to retain profits within the company for reinvestment rather than extract them immediately
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You are building a portfolio over the long term and prioritise compound growth over short-term cash flow
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You have no existing properties to transfer, so you avoid the SDLT and CGT costs on transfer
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You are investing with family members and want flexibility to split income efficiently
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You are comfortable with the slightly higher borrowing costs and using a mortgage broker experienced in SPV products
Incorporation is less likely to make sense if:
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You are a basic-rate taxpayer who plans to extract all profits as income — the combined tax rate through a company may be similar to or higher than the personal rate
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You already have a personal portfolio and would face significant SDLT and CGT costs to transfer it
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You only plan to buy one or two properties and the accountancy and admin costs eat into the tax saving
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You need the rental income for personal living expenses and cannot leave profits in the company to compound
Conclusion
Setting up a Buy-to-Let company in the UK is a straightforward process. What takes time is making the right decision about whether to do it, structuring the shares correctly, and getting a business bank account open.
For higher-rate taxpayers with long-term reinvestment plans, the case for incorporation is strong. For everyone else, the answer is less obvious. Getting the structure wrong, particularly if it leads to an unnecessary and costly portfolio transfer further down the line, is an expensive mistake.
Property SPV
Property SPV is a trusted platform dedicated to helping UK property investors streamline their journey by incorporating properties into Special Purpose Vehicle (SPV) companies. Whether you’re an experienced investor or just starting out, our mission is to simplify the complexities of SPV formation while ensuring you unlock valuable tax advantages and other benefits.