Personal vs Company: How Should You Own Buy-to-Let? (2026/27)
Last updated 24 June 2026 · 9 min read · By the LandlordTaxAi Editorial Team
The short answer
Owning personally means income tax at 20–45% with mortgage interest restricted under Section 24. Owning through a company means Corporation Tax at 19–25% with full interest relief — but a second tax (dividends at 10.75–39.35%) to take the money out. The best choice depends on your tax rate, gearing and whether you reinvest.
It’s the question every serious landlord eventually asks: should I hold property in my own name or in a limited company? There’s no universal answer — the right structure depends on your income, how much you borrow, and whether you live off the rent or reinvest it.
The calculator above compares both routes for 2026/27. This guide gives you the framework and the real numbers, so you decide on facts rather than the latest social-media hype. For the company detail, see the limited company buy-to-let calculator.
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Personal vs Company Tax Comparison
Compare personal ownership (with Section 24) against a company structure for your 2026/27 figures.
Result
- Taxable profit (rent − expenses)
- £11,200
- Income Tax at 40%
- £4,480
- Less mortgage interest credit (20%)
- − £1,000
- Tax due on this property
- £3,480
- Income after tax
- £7,720
Personal: income tax + Section 24. Company: Corporation Tax + dividend tax. Estimate only — take advice.
The two systems side by side
Personal and company ownership are taxed under completely different regimes. The headline difference is how mortgage interest is treated — and that’s what drives most decisions.
| Feature | Personal ownership | Company ownership |
|---|---|---|
| Tax on profit | Income tax 20% / 40% / 45% | Corporation Tax 19% / 25% |
| Mortgage interest | Restricted — 20% Section 24 reducer | Fully deductible (no Section 24) |
| Getting the money | It’s already yours | Dividend tax 10.75% / 35.75% / 39.35% |
| Admin cost | One personal return | Company accounts + CT return |
| CGT on sale | 18% / 24% personally | Corporation Tax within the company |
The company wins on interest relief but adds a second layer of tax and more admin. Personal ownership is simpler but exposes higher-rate landlords to the full Section 24 squeeze.
Who each structure suits
Rather than a blanket rule, think about which profile you fit.
- Personal usually wins: basic-rate taxpayers, low or no mortgage, or you need the rent as income to live on
- Company often wins: higher/additional-rate taxpayers, heavily mortgaged, building a portfolio and reinvesting profits
- It’s close: middle cases — model both before deciding
- Remember moving existing property into a company triggers CGT and SDLT — see incorporation tax cost calculator
A company is most powerful when you don’t draw the profit — leaving it in to buy more property defers the dividend tax. If you need the income now, the second layer bites and the advantage shrinks.
Finding your break-even
The deciding factor is usually the long-term saving from full interest relief versus the extra cost of a company (dividend tax, higher mortgage rates, accountancy).
For a highly-geared higher-rate landlord, the Section 24 saving can be large enough to justify a company even after dividend tax — especially over many years. For a low-geared basic-rate landlord, the company simply adds cost. The calculator above shows your own numbers both ways.
Decide on numbers, not hype
LandlordTaxAi models personal versus company ownership on your real figures — Section 24, Corporation Tax and dividends — so you choose the structure that actually saves you money.
See how it worksA worked example
A higher-rate landlord has £20,000 profit before £9,000 mortgage interest. Compare personal ownership with a company that retains the profit (2026/27).
| Personal: taxed on £20,000 at 40% | £8,000 |
| Personal: Section 24 reducer (20% × £9,000) | −£1,800 → £6,200 tax |
| Company: profit after full interest (£20,000 − £9,000) | £11,000 |
| Company: Corporation Tax at 19% | £2,090 (if retained) |
| Difference if profit reinvested | Company much cheaper |
Retaining profit in a company costs £2,090 vs £6,200 personally — but drawing it out as a dividend adds a second tax, narrowing the gap. Your plan for the money decides it.
Frequently asked questions
Is it better to own buy-to-let personally or in a company?
It depends. Companies suit higher-rate, heavily-geared landlords who reinvest. Personal ownership suits basic-rate or low-mortgage landlords, or those who need the income.
Why do landlords use companies?
Mainly to escape Section 24 — companies deduct mortgage interest in full, while personal landlords only get a 20% reducer.
What’s the catch with a company?
A second layer of tax: profit is taxed by Corporation Tax, then again as dividends (10.75–39.35%) when you extract it, plus more admin and often higher mortgage rates.
Does the company win if I spend the rental income?
Often not. Drawing profit out triggers dividend tax, which can wipe out the Corporation Tax saving. Companies shine when profits are reinvested.
Can I just move my properties into a company?
You can, but it’s a disposal at market value — triggering CGT and SDLT. Model the cost and take advice first.
Does this apply in Scotland and Wales?
Income tax bands differ in Scotland, and SDLT is replaced by LBTT (Scotland) and LTT (Wales) — but the personal-vs-company principle is the same.
Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 24 June 2026 · Researched against primary UK sources for the 2026/27 tax year: https://www.gov.uk/corporation-tax-rates; https://www.gov.uk/guidance/changes-to-tax-relief-for-residential-landlords-how-its-worked-out-including-case-studies; https://www.gov.uk/government/publications/changes-to-tax-rates-for-property-savings-dividend-income/changes-to-tax-rates-for-property-savings-dividend-income. This article is informational only and does not constitute tax advice. Check the latest details on GOV.UK or with a qualified accountant.