Company vs Personal Stamp Duty: Side-by-Side Cost Comparison 2026
Exact SDLT costs at 8 price points. Limited company vs personal purchase, including the 17% corporate flat rate and the 5% additional property surcharge.
At a Glance: Who Pays Less?
- Personal winsfor all residential purchases under £500,000 (identical SDLT above the nil-rate band, but no risk of 17% flat rate).
- Personal wins againover £500,000, where the company 17% flat rate creates a large premium (£52,000+ extra at £600k).
- Company only relevantwhen considering long-term income tax (Section 24, 25% corporation tax, ATED) rather than SDLT savings. See the 10-year total cost section below.
In this article
Rate Structure Side by Side
The critical difference: once the purchase price exceeds £500,000, a company stops using progressive rates and pays a flat 17% on the entire price. This replaced the previous 15% flat rate on 31 October 2024 (GOV.UK: SDLT corporate bodies).
| Purchase price | Personal (first home) | Personal (additional, +5%) | Company |
|---|---|---|---|
| Up to £125,000 | 0% | 5% | 5% |
| £125,001 to £250,000 | 2% | 7% | 7% |
| £250,001 to £500,000 | 5% | 10% | 10% |
| Over £500,000 | 5% / 10% / 12% (progressive, per band) | 10% / 15% / 17% (progressive, per band) | 17% flat on entire price |
Source: GOV.UK: Stamp Duty Land Tax, corporate bodies. Rates apply to England and Northern Ireland from 1 April 2025.
Full SDLT Comparison: 8 Price Points
All figures use post-April 2025 rates (nil-rate band at £125,000, 5% additional property surcharge). First-time buyer (FTB) relief: 0% on first £300,000 and 5% on £300,001 to £500,000. No FTB relief for companies.
| Price | Personal (FTB) | Personal (additional, +5%) | Company | Company vs Personal additional |
|---|---|---|---|---|
| £150,000 | £0 (FTB) | £8,000 | £8,000 | Same |
| £200,000 | £0 (FTB) | £11,500 | £11,500 | Same |
| £300,000 | £0 (FTB) | £20,000 | £20,000 | Same |
| £400,000 | £5,000 (FTB) | £30,000 | £30,000 | Same |
| £500,000 | £10,000 (FTB) | £40,000 | £40,000 | Same |
| £600,000 | £20,000 | £50,000 | £102,000 | Company +£52,000 |
| £750,000 | £27,500 | £65,000 | £127,500 | Company +£62,500 |
| £1,000,000 | £43,750 | £93,750 | £170,000 | Company +£76,250 |
FTB = first-time buyer relief (0% to £300k, 5% £300k to £500k; not available above £500k or to companies). Company SDLT at 17% flat on entire price when over £500k (GOV.UK confirmed).
The £500k Cliff Edge
The 17% rate is binary. At £500,000 a company pays £40,000 SDLT (progressive bands). At £500,001, it pays £85,000.17 — an extra £45,000 of tax for one pound more on the price. There is no marginal relief, no taper, no smoothing. This is a critical negotiation target.
Negotiation tactic: if you are buying through a company and the asking price is £510,000 to £530,000, getting the seller down to £500,000 saves £45,000 to £49,000 in SDLT — almost always worth more than the price reduction itself.
Compare to a personal buyer: at £500,001 a personal additional-property buyer pays £40,000.10 (just 10p more than at £500,000). The progressive bands move smoothly. Only companies face the cliff edge.
Winner by Scenario
| Scenario | SDLT winner | Why |
|---|---|---|
| Main residence, first home | Personal (always) | Companies cannot hold a main residence; FTB relief and replacement main residence refund are personal only. |
| Additional property under £500,000 | Personal (tie) | Both pay the same rates (standard + 5% surcharge). SDLT is identical; personal wins on simplicity and financing options. |
| Additional property £500,001 to £1M | Personal | 17% flat rate means company pays £52,000 to £76,250 more in SDLT at this price range. |
| Portfolio (6+ dwellings, one transaction) | Potentially company | The 6+ dwellings rule (non-residential SDLT rates) may apply. Multiple Dwellings Relief was abolished from 1 June 2024 and is no longer available. See portfolio landlord guide. |
| Buy-to-let under £500k, higher-rate taxpayer | SDLT: tie; overall: depends | SDLT cost is the same. Whether company wins overall depends on income tax, Section 24, and dividend extraction. See the break-even analysis below. |
Quick-Reference Rate Table
Marginal SDLT rate per band, personal vs company (post April 2025, England and Northern Ireland):
| Band | Personal (main home) | Personal (additional) | Company (under £500k) | Company (over £500k) |
|---|---|---|---|---|
| Up to £125,000 | 0% | 5% | 5% | 17% (entire price) |
| £125,001 to £250,000 | 2% | 7% | 7% | 17% (entire price) |
| £250,001 to £500,000 | 5% | 10% | 10% | 17% (entire price) |
| £500,001 to £925,000 | 5% | 10% | N/A | 17% (entire price) |
| £925,001 to £1,500,000 | 10% | 15% | N/A | 17% (entire price) |
| Over £1,500,000 | 12% | 17% | N/A | 17% (entire price) |
For companies: 17% is applied to the whole purchase price, not just the portion above £500,000. This is the key structural difference versus personal progressive rates.
Key Differences (Bullet Summary)
| Feature | Personal buyer | Company buyer |
|---|---|---|
| 5% additional property surcharge | Yes (if owning another property) | Yes (always applies) |
| 17% flat rate threshold | No (uses progressive bands) | Yes: over £500,000 |
| First-time buyer (FTB) relief | Yes (0% to £300k, 5% to £500k) | Never |
| Replacement main residence refund | Yes (3-year window) | No |
| Relief from 17% (property rental business) | N/A | Available (genuine BTL) |
| ATED annual charge (over £500k) | No | Yes (unless relief claimed) |
| Non-UK resident 2% surcharge | If non-UK resident | If non-UK resident |
When to Use Each Structure
Choose personal if:
- +Buying fewer than 6 properties (no portfolio scale advantage)
- +First-time buyer eligible (saves up to £10,000 SDLT)
- +Under 40% marginal income tax rate
- +Property over £500,000 (avoid £52,000 to £76,000+ SDLT premium)
- +Shorter hold period (harder to recoup higher SDLT via income tax savings)
- +Want access to mainstream buy-to-let mortgage market
Consider company if:
- +40% or 45% income tax bracket with significant rental income
- +Building a portfolio of 6+ properties (potential non-residential election)
- +Long hold period (10+ years) to amortise higher SDLT via lower income tax
- +Property under £500,000 so 17% flat rate does not apply
- +Reinvesting profits rather than extracting income each year
- +Qualify for ATED rental business relief (avoids annual charge)
Beyond SDLT: 10-Year Total Cost of Ownership
Upfront SDLT is only one part of the decision. The structure that wins depends on what happens over the hold period. The five tax cost components to model:
- SDLT at purchase — covered in tables above. Same under £500k, big company premium above.
- Income tax / corporation tax on rental profit — personal taxpayers on the higher rate pay 40% with Section 24 restriction; companies pay 19-25% with full mortgage interest deduction.
- ATED annual charge — companies owning residential property over £500,000 owe ATED unless rental business relief is claimed.
- Profit extraction (companies only) — dividends from a company face 8.75% / 33.75% / 39.35% dividend tax on top of the 25% already paid in corporation tax.
- Disposal tax — personal CGT at 18% / 24%; company corporation tax on the gain plus dividend tax to extract — potentially a 40%+ effective rate.
The annual income-tax saving (point 2) compounds over a long hold. The exit-extraction tax (points 4 and 5) eats into that gain. The break-even depends on income level, gearing, hold period, and whether profits are reinvested or drawn out.
Section 24 in Plain English
Section 24 of the Finance (No. 2) Act 2015, fully in force since April 2020, is the single biggest reason landlords incorporate. It removed the ability for personal landlords to deduct mortgage interest as a business expense. Instead, they receive only a 20% basic-rate tax credit on mortgage interest, regardless of their actual tax band.
Worked example: 40% taxpayer, £20k rent, £12k mortgage interest
- Personal (post-Section 24): taxable income = £20,000 (no interest deducted). Tax at 40% = £8,000. Less 20% credit on £12k interest = £2,400. Net tax: £5,600/yr.
- Personal (pre-Section 24, for context): taxable profit = £20,000 − £12,000 = £8,000. Tax at 40% = £3,200/yr.
- Limited company: taxable profit = £20,000 − £12,000 = £8,000. Corporation tax at 25% = £2,000/yr.
Section 24 turns £3,200/yr into £5,600/yr for the personal landlord. The company pays £2,000 — a £3,600/yr advantage that compounds over a long hold and amortises a higher SDLT bill.
The higher the loan-to-value and the higher your personal tax rate, the bigger the gap. Cash buyers with no mortgage interest are essentially unaffected by Section 24, removing one of the main reasons to incorporate.
ATED: The Annual Charge Over £500k
The Annual Tax on Enveloped Dwellings is a per-year charge on residential property worth over £500,000 held by a company. It is in addition to SDLT, corporation tax, and any other liabilities. 2026-27 charges:
| Property value | 2026-27 ATED charge | 10-year gross exposure |
|---|---|---|
| £500,001 to £1,000,000 | £4,600 | £46,000+ |
| £1,000,001 to £2,000,000 | £9,400 | £94,000+ |
| £2,000,001 to £5,000,000 | £31,950 | £319,500+ |
| £5,000,001 to £10,000,000 | £74,550 | £745,500+ |
| £10,000,001 to £20,000,000 | £149,750 | £1,497,500+ |
| Over £20,000,000 | £303,450 | £3,034,500+ |
ATED is CPI-linked and rises each year (the 2026-27 uplift was 3.8%). Most BTL companies claim property rental business relief, which reduces ATED to nil — but only if the property is commercially let at full market rent to an unconnected third party throughout the period. An annual ATED return must still be filed by 30 April even when relief reduces the charge to zero. Missing the filing carries penalties.
Personal owners pay no ATED. This is a structural cost specific to corporate ownership of high-value residential property.
SPV vs Trading Company
If you are using a company at all, almost everyone uses a Special Purpose Vehicle (SPV) — a limited company set up specifically for property. SDLT rates are the same either way; the difference is in financing, ATED relief eligibility, and operational tax.
SPV (Special Purpose Vehicle)
- • Registered with property SIC codes (68100 buying/selling, 68209 letting/operating)
- • No other business activities — clean credit profile for BTL lenders
- • Easiest path to BTL mortgage (most SPV-friendly lenders accept these)
- • ATED rental business relief works straightforwardly
- • Standard accountancy treatment
Trading company holding property
- • Mixes trading activities (consultancy, retail) with property investment
- • Most BTL lenders refuse or require restructuring
- • ATED relief gets complicated when property is mixed with non-rental activities
- • The 17% relief categories (rental business, property developer) are harder to evidence
- • Higher risk of HMRC enquiry on apportionment
Most landlords incorporating a portfolio set up a fresh SPV per property or per portfolio. See the SPV property investment guide for setup steps and lender requirements.
Tax Comparison Examples (1 to 10 Properties)
Annual income-tax saving from company ownership for a 40% personal taxpayer, before mortgage interest and extraction costs. Simplified to highlight the gap between corporation tax and post-Section 24 personal tax:
| Properties | Monthly rent | Personal tax (40%) | Ltd tax (25%) | Annual saving |
|---|---|---|---|---|
| 1 | £1,500 | £7,200 | £4,500 | £2,700 |
| 3 | £4,500 | £21,600 | £13,500 | £8,100 |
| 5 | £7,500 | £36,000 | £22,500 | £13,500 |
| 10 | £15,000 | £72,000 | £45,000 | £27,000 |
Simplified example: 12 months rent fully taxable, no mortgage interest deduction modelled (which makes the company advantage even bigger when present), no extraction tax (which eats into the saving when profits are drawn). For mortgaged portfolios, factor Section 24 into the personal column to see the full divergence.
Break-Even Analysis
Companies often pay more SDLT upfront (the £45k+ cliff edge over £500k, or the same below). The question is how long it takes for the annual income-tax saving to recover that premium plus ATED, accountancy, and higher mortgage costs:
| Scenario | Typical break-even | Why |
|---|---|---|
| Basic-rate taxpayer, 1 property, low LTV | Personal usually wins | Corporation tax (19-25%) is barely lower than 20% personal rate; compliance costs exceed any saving. |
| Higher-rate taxpayer, 2-3 highly mortgaged properties | 5-7 years | Section 24 hits hardest here; company saves £3-5k per property per year. |
| Additional-rate taxpayer, 5+ properties | 3-5 years | Largest gap between 45% personal and 25% corporation tax; portfolio scale spreads compliance costs. |
| Cash buyer, any income level | Personal usually wins | No mortgage interest, no Section 24 effect, no offsetting saving. |
| Reinvesting all profits, 10+ year hold | Company often wins | Avoids dividend tax drag; retained profits compound at corporation tax rates. |
| Drawing income immediately | Often a wash | Dividend tax (8.75-39.35%) wipes out much of the corporation-tax advantage. |
These are heuristics. Always model your own numbers: each property differs in price, gearing, rent, and your personal income mix. A qualified tax adviser is worth the fee on portfolio-level decisions.
Reliefs from the 17% Corporate Rate
Three named reliefs reduce a qualifying company's SDLT from the 17% flat rate down to standard rates (still with the 5% surcharge). All must be claimed in the SDLT return at completion — they cannot be claimed retrospectively.
Property Developer Relief
Available where the company is a developer acquiring residential property as trading stock for development and resale. SDLT is charged at standard rates (no 17%), and ATED does not apply. The company must be in the genuine business of developing property and must not occupy the property. HMRC scrutinises whether the company is a real developer or just enveloping property to claim the relief — evidence of development activity, planning applications, and contractor appointments all strengthen the position.
Property Rental Business Relief
Available where the company genuinely lets the property commercially as part of a property rental business. The property must not be available for personal use by connected persons (the controlling director, their spouse, family, etc.). HMRC scrutinises this relief carefully. A company that rents to the director's family at below-market rent, or that allows any personal use, will not qualify. An existing tenancy or letting agent instruction at completion strengthens the claim.
Employee Accommodation Relief
Available where the property is provided to an employee (or director earning over £75,000 per year) as part of their employment and they occupy it as their main home. Strict conditions apply on the employment relationship and nature of the occupation. The £75,000 director-salary threshold means this relief is only available for relatively senior roles.
Critical: Relief must be CLAIMED in the SDLT return at completion (within 14 days). It must also be claimed in the annual ATED return by 30 April for any ATED relief. HMRC has confirmed it does not accept late relief claims outside the original return window or the 12-month amendment window.
Corporate Compliance Mistakes
Corporate buyers and their advisers make a predictable set of errors. Most are costly and irreversible after the fact.
Forgetting to claim relief at completion
The single most expensive mistake. A property developer buying as trading stock has the right to standard rates instead of 17%. But if the SDLT return is filed without claiming the relief, the full 17% applies and HMRC will not accept a late claim outside the 12-month amendment window. Confirm relief eligibility and the claim mechanism with your solicitor before exchange, not on completion day.
Assuming rental business relief is automatic for SPVs
Many SPV property companies assume that because they intend to rent commercially, the rental business relief auto-applies. It does not. The relief must be explicitly claimed in the return, and the conditions (genuine commercial letting, no personal use by connected persons) must be met at completion. An intention to let is not enough — evidence at completion (existing tenancy, letting agent instruction) strengthens the position.
Missing the 30-day ATED return deadline
For new acquisitions over £500,000, the ATED return must be filed within 30 days of the effective date of the transaction. Many companies miss this and incur late-filing penalties. Even when a relief reduces ATED to nil, the return must still be filed. Set a calendar reminder on completion day.
Misunderstanding the 17% scope (banded vs flat)
Some advisers wrongly assume 17% applies only to the portion above £500,000, like a banded rate. It does not. At any price above £500,000, 17% applies to the entire consideration from £1. A company buying at £600,000 pays 17% on £600,000 (£102,000), not 17% on the top £100,000.
Mixing personal use into a corporate-owned property
Using a company-owned BTL personally — even occasionally — invalidates rental business relief and triggers the full 17% retrospectively. The same applies to ATED rental business relief: any personal use by a connected person breaks the conditions. HMRC investigates these arrangements, and the financial consequences of losing relief are catastrophic (full 17% SDLT plus annual ATED).
Related guides
- Corporate buyer complete guide: all SDLT rules for companies
- SPV property investment guide: setup, SIC codes, lender requirements
- Portfolio landlords with 6+ properties: stamp duty strategy guide
- Rental yield calculator: factor SDLT into investment returns
- Landlord income tax calculator: model Section 24 impact on your portfolio
Frequently Asked Questions
Is stamp duty cheaper buying through a company or personally?
Personally is cheaper in almost all cases. For properties under £500,000, both personal (additional property) and company buyers pay the same SDLT: standard rates plus the 5% surcharge. For properties over £500,000, the company pays a flat 17% on the entire purchase price, creating a large premium. At £600,000 the company pays £52,000 more; at £1,000,000 it pays £76,250 more.
When does the 17% corporate SDLT rate apply?
The 17% rate applies when a company, partnership with a corporate partner, or collective investment scheme purchases residential property costing more than £500,000. The rate is applied to the entire purchase price (not just the amount above £500,000). It replaced the previous 15% rate from 31 October 2024. Relief from the 17% rate is available for genuine property rental businesses, property developers, and certain trade purposes.
What is the exact SDLT difference at £500,000?
At exactly £500,000 the SDLT is the same: both personal (additional property) and company pay £40,000 using progressive rates (5% on first £125k, 7% on next £125k, 10% on next £250k). At £500,001 the company SDLT jumps to £85,000.17 — an extra £45,000 of tax for £1 more on the price. At £600,000 the gap becomes £52,000 versus a personal additional buyer.
Do limited companies qualify for first-time buyer relief on stamp duty?
No. First-time buyer relief is exclusively for individuals who have never previously owned residential property anywhere in the world. Limited companies, SPVs, and any other corporate entities are excluded entirely, regardless of whether the company has ever held property before.
Does the 5% additional property surcharge apply to company purchases?
Yes. Companies always pay the 5% higher rates surcharge on residential property, regardless of how many properties they own. There is no first-purchase exemption for companies. This surcharge increased from 3% to 5% on 31 October 2024. For properties over £500,000, the 17% flat rate effectively replaces (and greatly exceeds) the progressive rates including the surcharge.
When does it make financial sense to buy through a limited company?
Typically for higher-rate (40%) or additional-rate (45%) income tax payers carrying significant mortgage debt, owning multiple properties, with a 10+ year hold horizon. The annual corporation tax saving (25% vs 40%-45% personally under Section 24) accumulates and can exceed setup costs, higher mortgage rates, and £1,200-£2,500/year accountancy fees. Basic-rate taxpayers with one property rarely break even. Properties over £500k face additional ATED drag (£4,600/yr at the lowest band) unless rental business relief applies.
How does Section 24 affect the company vs personal decision?
Section 24 (in force since April 2020) prevents personal landlords from deducting mortgage interest as a full business expense — instead they get a 20% basic-rate tax credit. For a 40% taxpayer with £12,000 annual mortgage interest, the effective tax bill on £20k rent rises from £3,200 to £5,600/year. Limited companies are unaffected and deduct full interest before 25% corporation tax. This asymmetry is the primary driver of incorporation decisions.
What is the break-even point for incorporation?
Depends on portfolio size, mortgage debt, hold period, and property values. Basic-rate taxpayers rarely benefit because the 19-25% corporation tax is barely lower than 20% personal. Higher-rate taxpayers with 2+ highly mortgaged properties typically break even in 5-7 years. Additional-rate taxpayers with large portfolios can break even in 3-5 years. ATED on properties over £500k and any premium SDLT extends break-even.
How much does ATED add to corporate property ownership annually?
For 2026-27, ATED ranges from £4,600/year (£500k-£1m properties) up to £303,450/year (over £20m). Letting relief reduces this to nil if the property is commercially let at full market rent to an unconnected third party, but an annual return must still be filed by 30 April. Over a 10-year hold, gross ATED on a £750k property is £46,000 before relief.
What is an SPV, and is it different from a trading company?
A Special Purpose Vehicle (SPV) is a limited company set up specifically for property — typically registered with SIC codes 68100 (buying/selling) and 68209 (letting/operating). Lenders prefer SPVs because the company has no other business activities. Trading companies can also hold property but most BTL lenders refuse without restructuring, and mixing activities complicates ATED relief and 17% rate exemptions. SDLT rates are the same either way.
What are the hidden costs of company ownership beyond SDLT?
SPV BTL mortgage rates are 0.5-1% higher than personal BTL with 25-30% deposits required. Annual accountancy and Companies House fees run £500-£2,500. Director responsibilities include filing accounts and acting in the company's best interests. ATED applies to properties over £500k unless relief is claimed. On exit, company sale faces corporation tax on the gain plus dividend tax on extraction — potentially 40%+ effective rate, vs 18%/24% personal CGT.
Can I claim a relief from the 17% rate after completion?
No. SDLT relief claims must be made in the original return filed within 14 days of completion, or in an amended return filed within 12 months of the original filing date. Outside those windows HMRC will not accept late claims. A developer who fails to claim property developer relief at completion can face £85,000+ of additional tax on a £500,001 purchase that should have been at standard rates.
Does claiming SDLT relief automatically exempt me from ATED?
No. SDLT and ATED are separate taxes with separate relief claims. Claiming property rental business relief for SDLT does not automatically exempt you from ATED. You must also claim the equivalent ATED relief in your annual ATED return by 30 April each year. Missing the ATED return deadline triggers penalties even if no tax is ultimately due.
What counts as a "corporate body" for the 17% rate?
The 17% rate applies to "non-natural persons" — limited companies, limited liability partnerships (LLPs), partnerships with at least one corporate member, and collective investment schemes. Settlement trustees are explicitly excluded. Individual buyers — even very wealthy ones — are natural persons and never pay the 17% rate, regardless of how many properties they own.
Reviewed by
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 Calculate My Stamp Duty UK to help buyers understand the complex world of property transaction taxes.