Buying UK Property: Individual vs Company Ownership – A Complete Guide

January 9, 2026
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Investing in UK property, whether for your own residence or as an investment, requires one key decision: should you buy personally as an individual or through a limited company? This choice affects tax, financing, portfolio growth, and long-term returns.

This guide breaks down the pros and cons of both structures, using accurate, up-to-date 2025/26 UK tax and finance information, with considerations for all buyers, including UK residents and international investors.

Buying Property as an Individual

Buying property in your own name is the most common route for UK buyers and smaller-scale investors.

Advantages

  1. Simpler Setup and Lower Costs
    Purchasing as an individual involves less administration, fewer compliance requirements, and lower accounting fees. There are no incorporation costs or annual company filings.
  2. Mortgage Benefits
    Individual mortgages typically offer lower interest rates and a wider choice of lenders. According to UK Finance (2025), average buy-to-let mortgage rates for individuals are around 5.1%, compared to 6–6.5% for limited companies.
  3. Capital Gains Tax (CGT) Allowance
    Individuals benefit from an annual CGT allowance of £3,000 (2024/25–2025/26). CGT rates on residential property are:
    • 18% for gains within the basic rate tax band
    • 24% for gains above the basic rate tax band
  4. Ideal for a Primary Residence
    Individuals can purchase a property to live in. Company-owned properties are generally unsuitable for personal occupation due to tax implications.

Disadvantages

  • Rental income taxed at personal income tax rates (20%, 40%, 45%)
  • Mortgage interest relief restricted to a 20% tax credit
  • Less efficient inheritance planning, as property forms part of your estate for IHT

References: HMRC, UK Finance, NRLA

Buying Property Through a Limited Company

Limited companies, often referred to as Special Purpose Vehicles (SPVs), are commonly used by professional landlords and portfolio investors.

Advantages

  1. Tax Treatment of Profits
    Rental profits are subject to corporation tax rather than personal income tax. Corporation tax rates range from 19% to 25%, depending on profit levels.
  2. Full Deduction of Mortgage Interest
    Companies can usually deduct 100% of mortgage interest as a business expense, improving net cash flow.
  3. Flexible Profit Extraction
    Directors can take income via salary, dividends, or retain profits for reinvestment, allowing greater tax planning flexibility.
  4. Portfolio Growth and Succession Planning
    Property portfolios held in companies can be transferred through shares, helping simplify long-term succession planning.

Disadvantages

  • Higher setup and ongoing accounting costs
  • Mortgages require larger deposits (typically 25–30%) and higher interest rates
  • Dividend tax applies when profits are extracted personally (8.75%–39.35%)
  • Generally unsuitable for personal occupation due to benefit-in-kind tax risks

References: HMRC, UK Finance, NRLA

Considerations for All Buyers

  • Rental income taxation: Individuals are taxed at personal rates; companies at corporation tax rates
  • Mortgage and deposit requirements: Companies usually face higher deposit and lending thresholds
  • Long-term planning: Consider portfolio growth, CGT exposure, inheritance planning, and liquidity

Note for Overseas Buyers: Non-residents can purchase UK property, but should consider the overseas buyer Stamp Duty Land Tax (SDLT) surcharge, mortgage requirements, and cross-border tax planning. Many international investors use SPVs to manage UK property investments efficiently.

SDLT and Additional Costs

  • Nil-rate threshold for residential property: £125,000 (2025)
  • Additional dwellings surcharge: 5% on top of base SDLT rates
  • Applies to both individual and company purchases

Individual vs Company: Which Is Best?

Which option is best depends on your goals, tax position, and long-term plans.

  • Individuals: Simpler and cheaper to set up, better mortgage options, suitable for first-time buyers and owner-occupiers
  • Companies / SPVs: More suitable for higher-rate taxpayers, scalable for portfolio growth, and efficient when profits are reinvested

Final Thoughts

Understanding the pros and cons of individual versus company ownership is essential for maximising returns, managing tax exposure, and planning long-term growth. Accurate, up-to-date information ensures informed property investment decisions, whether you are a UK resident or an international investor.

For personalised guidance on buying UK property, speak to us.

References

  • HM Revenue & Customs (HMRC) – Capital Gains Tax guidance
  • Gov.uk – Stamp Duty Land Tax guidance
  • UK Finance – Mortgage Market Data 2025
  • NRLA – Individual vs Limited Company Buy-to-Let 2025
  • UK Property Accountants – SPV and Corporate Property Ownership 2025
  • LandlordStudio – UK Landlord Tax & Relief 2025
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