Why Is There A Buzz Around Buy-to-Let Companies?

The way landlords structure their property portfolios has changed drastically over the past few years. And in 2025, one question keeps cropping up: is it worth buying through a limited company? With shifting tax rules, rising interest rates and rental demand surging, many investors are reviewing their setup to protect profits and plan for the long term.

Let’s break down why limited company buy-to-let is still on the rise, the potential pros and cons, and what it actually means for your next move.

Why so many landlords are going limited

Over 400,000 limited companies now hold buy-to-let property in the UK—a figure that’s grown over 300% in the last decade. And in 2024 alone, more than 61,000 new companies were created just for property investment purposes (Source: Buy Association).

The main driver behind this? Tax efficiency.

Since Section 24 came into play, individual landlords can no longer deduct mortgage interest from rental income. But limited companies still can. This means your company is taxed on the profit—not the income—giving you more breathing room on cash flow and long-term returns.

What this means for your bottom line

If you’re a higher-rate taxpayer, using a limited company could significantly reduce your annual tax bill. Corporate profits are taxed at 19% (up to £50k) or 25% for higher earnings—both lower than the 40–45% personal income tax bands (Source: UK Mortgage Broker). Plus, using a company means you avoid pushing your personal income into a higher bracket, protecting allowances and benefits.

But remember—taking the money out of the company (via salary or dividends) will still incur personal tax. So if you're relying on regular income now rather than building long-term wealth, the benefits may be less clear-cut.

Quick stats at a glance:

- 61,517 new buy-to-let companies set up in 2024

- Over 400,000 companies now hold rental property

- No mortgage interest relief for individuals

- Full mortgage interest relief for limited companies

So... should you be considering being a Limited Company?

It may be beneficial for you if:

·      You’re building a portfolio and reinvesting profits

·      You’re a higher-rate taxpayer

·      You want to limit your exposure to personal income tax changes

But you may see less benefits if you:

·      You need to draw large amounts of income regularly

·      You own existing properties personally (transfer costs can be high)

·      You’re investing short-term or with minimal borrowing

What this means: Before jumping in and making any decisions, we always recommend you speak to a tax advisor and crunch the numbers based on your specific goals. For many investors, going limited still makes strong financial sense—but it’s not a one-size-fits-all decision.

Still feeling unsure? That’s what we’re here for – we’ll give our advice and make honest recommendations based on your situation and investment goals, so you know you’re always getting advice you can trust when you look to work with Donelan Property.

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