Should I Buy My Rental Property Through a Limited Company or in My Own Name?

Should I Buy My Rental Property Through a Limited Company or in My Own Name?

When starting or growing a property portfolio, one of the first big questions landlords ask is:
“Should I buy property in my own name, or through a limited company?”

It’s a smart question and the answer depends on your goals, your tax position, and how far you plan to take your property journey.

At Personal Economy Lettings, we speak with landlords every week who are weighing up this exact choice. So, here’s a clear, jargon-free overview to help you make an informed decision.

Why This Choice Matters

The way you buy your rental property effects:

• How much tax you’ll pay on your rental income
• Whether you can deduct mortgage interest
• The type of mortgage products available to you
• How easily you can grow or pass on your portfolio

There’s no one-size-fits-all answer but understanding the basics will help you choose the structure that fits your plans.

Option 1: Buying in Your Own Name

If you buy a rental property personally, the income and expenses are linked to your individual tax return.

You’ll pay income tax on your rental profits at your usual rate - 20%, 40%, or 45%.

Since the government introduced Section 24, landlords can no longer fully offset their mortgage interest against rental income. This means some investors, especially higher-rate taxpayers, are now paying more tax than before.

However, if you’re a basic-rate taxpayer with one or two properties and minimal borrowing, personal ownership can still make sense. It’s simple to manage, and you can make use of your personal allowances.

Option 2: Buying Through a Limited Company

A limited company buy-to-let means the company owns the property, not you personally.

The rental income belongs to the company, and it pays corporation tax on its profits, currently up to 25% for many businesses.

Unlike personal ownership, mortgage interest is fully deductible as a business expense, which can make a big difference for highly leveraged investors.

For those planning to build a larger portfolio, a company structure also allows profits to be retained and reinvested more tax-efficiently, without drawing them out personally each year.

Pros and Cons at a Glance

	Personal Ownership	Limited Company
Tax Rate	20–45% income tax	19–25% corporation tax
Mortgage Interest Relief	Restricted (Section 24)	Fully deductible
Admin & Setup	Simple	Requires company accounts & filings
Mortgage Options	Wider choice	Slightly higher rates (0.5–1%)
Profit Reinvestment	Must withdraw personally	Can reinvest within the company
Best For	Small landlords, low borrowing	Portfolio builders, higher-rate taxpayers

Common Mistakes to Avoid

• Not getting advice early: Changing ownership structure later can trigger stamp duty and capital gains tax.
• Assuming a company always saves tax: For smaller landlords, setup and admin costs can outweigh the benefits.
• Ignoring long-term plans: Think beyond your first purchase — the right structure should work for the next five or ten years, not just today.

So, Which Option Is Right for You?

If you’re starting small, personal ownership is often the simplest route.
If you’re planning to build a larger, more professional portfolio, especially with mortgages involved, a limited company may be the smarter long-term play.

Either way, it’s essential to get tailored tax advice before you buy. The right structure at the start can save you thousands and give you flexibility as your portfolio grows.

Final Thoughts from Personal Economy Lettings

At Personal Economy Lettings, we work with landlords across all stages, from first-time investors to experienced portfolio owners.
Whether you buy in your own name or through a company, the goal is the same: to make your property work for you.

If you’d like to talk through your letting plans, book a Clarity Call with our team — we’ll help you structure your next step with confidence.

https://personaleconomypartners.com/landing/book-a-clarity-call