Advantages of holding property in a limited company

In recent years, many landlords and property investors have started shifting their investments from personal ownership to company ownership. With changing tax laws, growing portfolios, and the need for better financial efficiency, holding property in a limited company has become a strategic move.

But is it the right decision for you? Let’s explore the key advantages of holding property through a limited company structure.

1. Tax Efficiency

One of the most compelling reasons investors choose to hold property in a limited company is the tax advantages. Unlike individual landlords who pay income tax on rental profits (which can be as high as 45%), limited companies pay corporation tax at a flat rate—currently 25% (as of 2025).

This difference can significantly reduce the tax burden, especially for higher-rate taxpayers.

2. Mortgage Interest Relief

Private landlords can no longer fully deduct mortgage interest from their rental income before calculating tax. Instead, they receive a basic rate tax credit (20%). Limited companies, however, can still claim full mortgage interest as a business expense, which can make a substantial difference in profit and tax liability.

3. Easier Profit Retention and Reinvestment

When you own property through a company, profits can be retained within the business for future investment without drawing them as personal income. This allows for more efficient scaling of your property portfolio without triggering additional income tax charges.

4. Succession Planning and Estate Management

Holding property in a company allows for more flexible estate planning. Shares in a company can be transferred to children or family members, often with less tax implication compared to transferring the actual property.

This structure can help reduce inheritance tax liabilities and ensure smoother succession planning.

5. Professional Image and Credibility

Operating under a company name gives a more professional image, especially when dealing with letting agents, banks, and tenants. It also allows you to separate personal and business finances clearly, making accounting and budgeting more straightforward.

6. Limited Liability

As the name suggests, a limited company structure protects your personal assets. If the  company runs into financial trouble, your personal liability is limited to the value of your sharesoffering an extra layer of security.

Are There Any Drawbacks?

Yes, holding property in a limited company isn’t without its challenges:

• Higher setup and admin costs

• Potentially higher mortgage rates

• Capital Gains Tax implications when transferring existing property into a company

That’s why it’s essential to get professional advice before making the switch.

Need Help Deciding?

At DNS Associates, we specialise in property tax and company structuring. Whether you’re a first-time investor or managing a growing portfolio, we can help you make the right decision based on your goals.

Speak to a specialist now – request a free callback

Let’s build your property investment future the smart way.