Company vs Personal Property Purchase: Stamp Duty Comparison
Companies pay 17% flat SDLT on residential property over £500,000 (from 31 October 2024). Under £500,000 the rate matches the personal rate — but ATED, CGT, and income tax differences make this a complex whole-portfolio decision.
Key Takeaways
- •Company 17% flat SDLT rate on residential over £500k applies from 31 October 2024 (was 15%)
- •Under £500k: company and personal buyers pay the same SDLT (standard + 5% surcharge)
- •Companies can deduct full mortgage interest; personal landlords are restricted by Section 24
- •CGT: personal 18%/24% (from April 2025); company pays corporation tax then dividend tax on extraction
- •ATED applies annually to company-owned residential property over £500k — up to £303,450/year
- •Company advantage typically emerges only for higher-rate taxpayers holding 4+ properties long-term
In this article
SDLT: Company vs Personal Rates
The SDLT comparison between company and personal buyers depends critically on the purchase price relative to £500,000. The Autumn Budget 2024 (31 October) increased the corporate residential rate from 15% to 17%.
| Price | Personal (std + 5%) | Company ≤£500k | Company >£500k (17%) | Company Premium |
|---|---|---|---|---|
| £250,000 | £18,750 | £18,750 | N/A | — |
| £400,000 | £30,000 | £30,000 | N/A | — |
| £500,000 | £40,000 | £40,000 | £85,000 | £45,000 |
| £600,000 | £52,500 | N/A | £102,000 | £49,500 |
| £750,000 | £68,750 | N/A | £127,500 | £58,750 |
| £1,000,000 | £93,750 | N/A | £170,000 | £76,250 |
| £1,500,000 | £143,750 | N/A | £255,000 | £111,250 |
At the £500k threshold, a company buying at £500,001 pays £85,000 vs £40,000 for a personal buyer — more than double. The 17% rate is highly penalising for company purchases in this range.
Interactive Comparison Tool
Model the total tax impact over your planned hold period. This tool compares SDLT acquisition cost, income tax (personal) vs corporation tax and dividend tax (company), and ATED where applicable.
Company vs Personal Comparison Tool
Personal Purchase
SDLT: £30,000
Income tax (10 yrs): £80,000
ATED: £0 (personal owners exempt)
Total: £110,000
Company Purchase (SPV)
SDLT: £30,000
Corp tax + dividends: £100,625
Total: £130,625
Income Tax: The Key Advantage of Company Ownership
Since April 2017, Section 24 of the Finance Act has progressively restricted the mortgage interest deduction for individual landlords. By April 2020 the restriction was fully in effect: personal landlords can only claim a basic rate tax credit (20%) on mortgage interest, not deduct the full interest against rental income. For a higher-rate taxpayer borrowing heavily, this is a severe penalty.
A limited company has no such restriction. It can deduct full mortgage interest as a business expense before corporation tax, just as any other business expense. This makes the company route materially more attractive for:
- ✓Higher-rate or additional-rate taxpayers (40%–45% personal income tax)
- ✓Landlords with high loan-to-value ratios (large mortgage interest costs)
- ✓Investors who can leave profits inside the company (defer dividend extraction)
The effective combined tax rate when extracting all profits as dividends is approximately 50.3% (25% corporation tax + 33.75% dividend tax on the remaining 75%) for a higher-rate taxpayer. This compares to 40% personal income tax — but the company can deduct full mortgage interest, often making it net better despite the slightly higher effective rate.
Capital Gains Tax Comparison
From 6 April 2025, CGT rates for residential property are 18% (basic rate) and 24% (higher rate) for personal owners. The annual exempt amount is £3,000.
Companies pay corporation tax on capital gains at 19–25%, then dividend tax when distributing proceeds. The effective combined rate is similar to or higher than the 24% personal CGT rate for higher-rate taxpayers — but companies do not have the same annual exempt amount limitation (they can set losses against gains more flexibly).
| Scenario | Buy Price | Sell Price | Personal CGT (24%) | Company (corp + div) |
|---|---|---|---|---|
| BTL standard | £250,000 | £350,000 | £23,280 | £38,250 |
| BTL higher value | £500,000 | £700,000 | £47,280 | £80,000 |
| Main home (PPR) | £300,000 | £450,000 | £0 | N/A |
Personal CGT assumes gain after SDLT deduction and £3,000 annual exempt. Company assumes 25% corp tax + 33.75% dividend on remainder. Main home qualifies for Private Residence Relief — no CGT.
ATED: The Hidden Annual Cost for Companies
Annual Tax on Enveloped Dwellings (ATED) is a charge that applies to residential property worth more than £500,000 held in a corporate envelope. It is payable every April regardless of whether the property generates income. For 2026-27:
| Property Value | ATED 2026-27 (annual) |
|---|---|
| £500,001 – £1,000,000 | £4,600 |
| £1,000,001 – £2,000,000 | £9,400 |
| £2,000,001 – £5,000,000 | £31,650 |
| £5,000,001 – £10,000,000 | £73,550 |
| £10,000,001 – £20,000,000 | £147,900 |
| Over £20,000,000 | £303,450 |
ATED applies to UK residential property owned by companies (not SPVs used for commercial letting). Reliefs available for genuine rental businesses.
An ATED relief is available for property let commercially (at arm's length to third parties). You still file an ATED return but the relief reduces the charge to zero. However, the relief must be claimed annually and the letting must be genuine — you cannot use the property personally and claim the relief.
SPV Structures and Considerations
A Special Purpose Vehicle (SPV) is a limited company created specifically to hold one or more investment properties. It is distinct from a trading company. Key considerations:
Mortgage availability
SPV mortgages are available from specialist lenders but typically at higher rates (0.5–1.5% above personal BTL rates) with stricter criteria. The improved tax position must exceed the mortgage premium cost.
Professional costs
Accountancy fees for an SPV range from £1,000–£3,000/year for company accounts, corporation tax return, and director self-assessment. These are deductible business expenses but add to overall cost.
Inheritance tax benefit
Shares in an SPV can be gifted or transferred more easily than property — you can sell a partial shareholding without triggering SDLT. However, Business Property Relief (BPR) does not apply to property investment companies, so IHT exposure remains.
Selling the company vs the property
A buyer purchasing the SPV shares (rather than the property) does not pay SDLT. This can make the property more attractive to sell and enable the seller to command a premium. However, SDLT Stamp Duty Reserve Tax (0.5%) applies on share transfers.
When Does Company Ownership Win?
Based on the combined tax analysis, company ownership typically produces a better outcome when:
Company WINS when:
- • You are a 40–45% income taxpayer
- • You have large mortgage debt (Section 24 restriction is painful)
- • You own 4+ properties and build long-term
- • You can reinvest profits (defer dividend extraction)
- • Purchase price is under £500,000
- • Hold period is 10+ years
Personal WINS when:
- • Purchase price is over £500,000 (17% flat rate)
- • You are a basic rate taxpayer
- • You need to extract income regularly
- • Short hold period (under 5 years)
- • You want to use Private Residence Relief (main home)
- • ATED charges erode returns
Frequently Asked Questions
Is it cheaper to buy property through a limited company?
Under £500,000: the SDLT cost is identical. Over £500,000: the company pays 17% flat rate which is almost always more expensive than the personal banded rate. The company advantage comes from ongoing income tax savings (full mortgage interest deduction, lower corporation tax), not lower SDLT. The decision must be modelled over the full investment horizon including ATED.
What is the 17% stamp duty rate for companies?
The 17% flat rate applies when a corporate body purchases a residential property valued over £500,000. It was increased from 15% on 31 October 2024. The rate applies to the entire purchase price — so a £600,000 company purchase pays £102,000 in SDLT (17% × £600,000). There is no banding; it is a single rate on the whole price.
Can I transfer my existing properties into a company later to get the tax benefits?
Yes, but it triggers SDLT. A transfer from personal to company is treated as a disposal at market value — the company pays SDLT at the corporate rate on market value. With the 5% surcharge (or 17% for values over £500k), incorporation SDLT can be substantial. There is no incorporation relief for residential property in the way there is for trading businesses. Model the full SDLT cost against the projected tax savings before proceeding.
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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.