The decision to buy a property in a personal name or through a limited company is one of the biggest tax structuring choices in UK property. The income-tax case for using a company has strengthened since 2017, when mortgage interest relief for individual landlords was tapered out under what became known as "Section 24". But the SDLT case — particularly for first purchases — has always been worse for companies. This article explains why, and when buying through a company can still be the right call.
The basic SDLT position
A limited company buying residential property pays the same standard SDLT rates as an individual — but with two key uplifts.
The 5% additional-dwelling surcharge always applies. An individual's first home (or replacement of main residence) escapes the 5% surcharge. A company has no concept of a "main residence" — so the 5% surcharge applies on every purchase, including the company's first.
The 17% flat rate for properties over £500,000. Where a residential property is bought by a company for more than £500,000 and ATED relief does not apply (see below), a single flat 17% rate applies to the entire purchase price. This rose from 15% in the October 2024 Budget. It is one of the most aggressive tax rates in UK personal taxation and is intended to penalise "enveloping" of high-value residences for purely tax-shelter reasons.
Annual Tax on Enveloped Dwellings (ATED)
Residential properties valued over £500,000 and held by a corporate entity are subject to ATED — an annual charge that scales with property value, currently from about £4,400 up to £290,000+ for the very top band. Reliefs are available for genuine letting businesses, property development, or trading purposes. Without an applicable relief, ATED makes high-value residential ownership inside a company extremely expensive.
Worked example: £600,000 house
Bought by an individual (own home). Standard residential SDLT applies. At post-April-2025 rates: £20,000 SDLT.
Bought by an individual (second home). Standard SDLT plus 5% surcharge on £600,000 = £20,000 + £30,000 = £50,000 SDLT.
Bought by a company with ATED relief (letting business). Standard SDLT plus 5% surcharge on £600,000 = £50,000 SDLT. ATED charge is reclaimed via relief but annual filing is required.
Bought by a company without ATED relief. 17% flat rate on the £600,000 = £102,000 SDLT. Plus annual ATED of around £4,400. This rate is punitive by design.
When buying through a company still makes sense
Portfolio buy-to-let landlords. Despite higher SDLT, the income tax advantages of corporate structure (full deductibility of mortgage interest at corporation tax rates) can outweigh the SDLT premium for higher-rate-taxpayer landlords building a portfolio. See our buy-to-let SDLT guide for the broader analysis.
Succession and estate planning. A family investment company can hold property across generations more cleanly than personal ownership, potentially saving on inheritance tax over time.
Ring-fencing risk. Property held in a company is separated from the owner's personal financial risk. This matters for individuals with significant business risk in other ventures.
Joint ventures and outside investors. A company structure is the natural vehicle for property bought with partners or investors who aren't family.
When it almost never makes sense
Buying your own home through a company is almost always tax-inefficient. The SDLT premium is real, the ATED issue can be expensive, and the income-tax benefit of corporate structure doesn't apply because you're not generating rental income. The benefit-in-kind charge for living in a company-owned property can be very large. For owner-occupiers, personal ownership is almost always the answer.
Get tax advice before you buy
This is one of the most technically complex areas of UK tax. Income tax (Section 24), corporation tax, capital gains tax on sale, dividend tax to extract profits, SDLT on purchase, ATED, inheritance tax, and the higher-rate surcharge all interact. The right structure depends on your wider tax position. A specialist property tax adviser is worth their fee here.
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