Should You Own Property Personally or Through a Company?
If you’re a landlord or thinking about investing in property, one of the first big questions you’ll face is:
👉 Should I hold property in my own name, or set up a limited company?
It’s a hot topic right now, especially with changes in mortgage relief, tax rates, and the ongoing risk of new government policy shifts. Let’s walk through the main pros and cons — in plain English.
Owning Property Personally
For many landlords, personal ownership is the traditional route. You buy the property in your own name, declare the income on your self-assessment, and pay tax accordingly.
Pros:
- Simpler to set up and manage — no company admin
- Lower costs upfront — no need for incorporation or company accounts
- Capital gains tax (CGT) allowances may apply when you sell
- Easy to withdraw profits directly
Cons:
- Rental income is taxed at your personal income tax rate — which could be 20%, 40%, or even 45%
- Since mortgage interest relief changes, you can no longer deduct all finance costs against rental income
- If you own multiple properties, your tax bill can rise quickly
Owning Property Through a Limited Company
More landlords are now considering company structures, especially those building a portfolio.
Pros:
- Corporation tax is generally lower than higher-rate personal income tax
- Mortgage interest is still fully deductible against profits in a company
- Flexibility on extracting profits via dividends, salaries, or reinvestment
- Potentially more attractive for estate planning or passing assets to family
Cons:
- More admin — annual accounts, company tax returns, and compliance costs
- Higher mortgage rates for limited company borrowing
- CGT may apply if you transfer personally owned properties into a company
- Funds withdrawn from the company may still face dividend tax
Capital Gains Tax – A Key Consideration
No matter how you structure ownership, capital gains tax (CGT) is something to plan for. If the value of your property increases, selling it could create a significant tax bill.
- For individuals, CGT on property gains is currently 18% (basic rate) or 24% (higher/additional rate).
- Companies pay corporation tax on gains but there can be double taxation if profits are later extracted.
The key takeaway? Either route can still face a CGT hit and timing your sale or planning ahead makes a big difference.
The Wildcard: Government Tax Changes
Perhaps the biggest challenge is one no landlord can control: future government tax policy.
Over the past few years, we’ve seen:
- Mortgage interest relief changes for personal ownership
- Adjustments to corporation tax rates
- Shifts in CGT rates for property disposals
This means the structure that looks best today may not be the most efficient tomorrow. The only way to stay ahead is to review your setup regularly and plan with flexibility in mind.
So… Which Option Is Best?
There’s no one-size-fits-all answer. The right choice depends on:
- Your current income and tax band
- Whether you’re holding one property or building a portfolio
- Your long-term goals (e.g. reinvest, sell, pass to family)
- Your tolerance for admin vs simplicity
- What October brings?!
At BAA Group, we help landlords and property investors model different scenarios, stress-test the numbers, and make informed decisions. We’ll also keep an eye on government changes so you can adapt quickly.
Final Thoughts
Property can be a fantastic investment — but the way you own it has a big impact on your tax bill and long-term returns. Personal ownership might suit someone with one or two properties, while a limited company could be the right path for portfolio landlords. Both come with trade-offs.
The important thing is not to guess — but to get advice tailored to your situation.
📞 Book a free discovery call with BAA Group today to review your property ownership strategy and make sure you’re set up for success.
🌐 Visit: www.baagroup.co.uk
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