Company vs Personal Property Purchase: SDLT Compared
Understanding the stamp duty implications of buying property through a limited company versus personal ownership, including the 17% corporate rate and annual ATED charges.
Key Points
- •Companies pay 17% flat rate on residential property over £500,000
- •Below £500,000, companies pay standard rates + 5% surcharge (same as individuals)
- •Companies also face annual ATED charges on properties over £500,000
- •Corporation tax on rental income (25%) can be lower than personal income tax (up to 45%)
Company vs Personal: Key Differences
When purchasing property in England or Northern Ireland, the ownership structure has significant stamp duty implications. Companies and other "non-natural persons" face different SDLT rates and additional annual charges compared to individual buyers.
The decision between company and personal ownership depends on multiple factors beyond stamp duty, including income tax treatment of rental profits, capital gains tax on disposal, inheritance tax planning, and administrative complexity.
This guide compares the SDLT and ongoing tax implications to help you understand when company ownership might make financial sense despite higher upfront stamp duty costs.
SDLT Rates Compared
Under £500,000 – Same Rates
For properties under £500,000, both companies and individuals purchasing additional properties pay the same SDLT rates (standard rates plus 5% surcharge):
| Property Value Band | SDLT Rate |
|---|---|
| Up to £125,000 | 5% |
| £125,001–£250,000 | 7% |
| £250,001–£500,000 | 10% |
Over £500,000 – Significant Difference
Above £500,000, companies pay a flat 17% rate on the entire purchase price, while individuals continue with progressive rates plus the 5% surcharge:
| Property Price | Personal (Standard + 5%) | Company (17% Flat) | Difference |
|---|---|---|---|
| £500,000 | £40,000 | £85,000 | Company +£45,000 |
| £750,000 | £65,000 | £127,500 | Company +£62,500 |
| £1,000,000 | £93,750 | £170,000 | Company +£76,250 |
| £1,500,000 | £168,750 | £255,000 | Company +£86,250 |
| £2,000,000 | £253,750 | £340,000 | Company +£86,250 |
The 17% Corporate Rate
The 17% flat SDLT rate applies to "non-natural persons" purchasing residential property over £500,000. This includes:
- Limited companies
- Partnerships where any partner is a company
- Collective investment schemes
- Unit trusts
Unlike the progressive rate structure for individuals, the 17% rate is applied to the entire purchase price, not just the portion above £500,000. This replaced the previous 15% rate in October 2024.
The rate was introduced to discourage the use of corporate structures for residential property ownership, particularly for high-value properties, and to close avoidance schemes that used corporate enveloping.
Annual Tax on Enveloped Dwellings (ATED)
In addition to the higher upfront SDLT, companies holding UK residential property valued over £500,000 must pay an annual ATED charge. The charge is banded by property value:
| Property Value | Annual ATED Charge (2025/26) |
|---|---|
| £500,001–£1,000,000 | £4,400 |
| £1,000,001–£2,000,000 | £9,000 |
| £2,000,001–£5,000,000 | £30,550 |
| £5,000,001–£10,000,000 | £71,500 |
| £10,000,001–£20,000,000 | £143,550 |
| Over £20,000,000 | £269,450 |
ATED Relief Available
Full ATED relief is available for properties used in a genuine property rental business, property development business, or properties made available to the public. Companies must file an ATED return claiming relief even if no charge is due.
Worked Examples
Example: £750,000 Buy-to-Let Property
Personal Purchase
Rental Income Tax:
- • Taxed at marginal rate (20%, 40%, or 45%)
- • Mortgage interest relief limited to basic rate (20%) tax credit
- • If higher-rate taxpayer: effective rate up to 45% on rental profits
Company Purchase
Rental Income Tax:
- • Taxed at corporation tax rate (25%)
- • Full mortgage interest deductible against rental income
- • No restriction on interest relief
*ATED relief available if property is used in a genuine rental business
Long-Term Comparison
Despite £62,500 higher upfront SDLT, company ownership can be advantageous over time if:
- • You're a higher-rate (40%) or additional-rate (45%) taxpayer
- • The property generates significant rental income with mortgage interest
- • You qualify for ATED relief (genuine rental business)
- • You plan to hold the property long-term and reinvest profits
When Company Ownership Makes Sense
Company Advantages
- •Lower income tax: Corporation tax at 25% vs personal rates up to 45%
- •Full mortgage interest relief: No restriction on deductibility
- •Profit retention: Reinvest profits within company at corporation tax rates
- •IHT planning: Shares can be more flexible for estate planning
- •Multiple ownership: Easier to share ownership via shares
Company Disadvantages
- •Much higher SDLT: Up to £86,250 more on £1.5M property
- •ATED charges: Minimum £4,400/year (unless relief applies)
- •Administrative burden: Company accounts, annual returns, compliance
- •Mortgage challenges: Fewer lenders, higher rates, larger deposits required
- •Extraction tax: Dividend tax when withdrawing profits personally
Company ownership typically makes most sense for higher-rate taxpayers building substantial buy-to-let portfolios who qualify for ATED relief and plan to reinvest profits rather than extracting income immediately.
Reliefs and Exemptions
Companies can avoid the 17% flat rate and pay standard SDLT rates if the property is acquired for one of these purposes:
Property Rental Business
The property must be acquired for use in a genuine property rental business. This is the most common relief claimed by buy-to-let limited companies. The business must be a qualifying business carried on throughout the ownership period.
Property Development or Trading
Properties purchased for development and resale as trading stock by property developers can qualify for relief. The company must carry on a property development or property trading business.
Farmworker Accommodation
Properties used to provide accommodation for certain categories of agricultural workers may qualify for relief from the higher rates.
Professional Advice Essential
The decision between company and personal ownership has complex tax implications beyond SDLT, including income tax, capital gains tax, inheritance tax, and ongoing compliance requirements. Always seek specialist tax and legal advice before deciding on an ownership structure.
Compare Ownership Structures
Use our calculator to compare the SDLT costs of company versus personal ownership for your specific purchase, or explore our detailed guide on corporate property purchases.
Emma Richardson, MRICS
Chartered Surveyor & Property Tax Specialist
Emma Richardson is a RICS-qualified Chartered Surveyor with over 12 years of experience in UK property taxation. She founded Stamp Duty Calculator to help buyers understand the complex world of property transaction taxes.