Can limited company landlords achieve higher returns? We look at why more landlords are incorporating their portfolios than ever before.
A limited company landlord is one who owns at least one property via a limited company structure, rather than in their own personal name. It is a method of investing that has become increasingly common in recent years.
For professional portfolio landlords who have been in the business for many years, operating through a limited company is less of a novel idea. It makes sense for many reasons to operate via a company structure, offering a more professional process with numerous advantages.
However, the number of smaller limited company landlords – even those who own just one property – is also on the rise, demonstrating the potential for savvy investors to make stronger profits by incorporating their properties.
The rise and rise of limited company landlords
Several reports have come out in recent years showing the continued and accelerating increase in the number of landlords buying and operating buy-to-lets through a limited company.
The latest of these is the Q2 2025 Landlord Trends from Foundation Home Loans, which last week revealed that 20% of landlords now have at least one buy-to-let mortgage in a limited company, rising to 30% for portfolio landlords.
The interesting part of the research is the level of increase, with the average proportion of a limited company landlord’s portfolio held in a company structure more than doubling from 36% in Q1 2020 to 74% in Q2 2025.
Looking at future plans, 63% of landlords planning to increase their portfolios said they would use a limited company to buy their next property or properties, compared with just 29% who said they would buy in their own name.
But out of the existing limited company landlords, none said they would buy their next property as an individual, reflecting the fact that the structure, once set up, tends to remain a more preferable option.
What are the benefits?
Profitability is the top concern among the majority of investors, meaning that most of those who have incorporated have calculated that this is the most advantageous for their financial situation.
The main way limited company landlords can benefit is through reduced tax liability. This is because, rather than paying income tax, profits on limited company buy-to-lets are subject to corporation tax, set at a lower rate. This can be particularly beneficial to those who would otherwise pay the higher rate of income tax.
Profits can also be reinvested into the business, held within the company for future use, or drawn down as dividends, which can also offer tax benefits compared with having a salary.
You also have limited liability protection through a company structure, which can safeguard your personal assets if your business experiences losses.
So why has interest in becoming a limited company landlord skyrocketed? Since the introduction of Section 24, mortgage interest can no longer be deducted from your income tax bill if you’re an individual landlord – instead, you can claim a 20% tax credit, but many people are worse off because of the change.
But because limited companies are liable for corporation tax rather than income tax, the new tax rules do not apply, which could mean you can deduct the full interest amount when calculating your profits.
Should I switch?
If you already own properties as an individual, you may be advised against transferring ownership to a limited company, as this would generate a stamp duty bill and other costs.
When looking at investing in a new property under a limited company, there are some downsides to be aware of. For example, there is no capital gains tax allowance for limited company landlords, because corporation tax is instead paid on any gains upon sale of the property. For personal owners, the capital gains tax allowance can help add to your final profit.
If you’re a lower-rate tax payer, it is also important to work out whether you will actually make any savings by operating as a limited company rather than as an individual. You should also take into account the administrative costs of managing a company.
It is advisable to speak with an expert if you are considering becoming a limited company landlord, to ensure that any potential financial gains outweigh the costs involved.
