Owning rental property through a company: the sums after Budget 2026
With property income rates rising to 24%, 44% and 49%, more landlords are asking whether a company makes sense. It can, but the costs of getting there are real.
From April 2027, a higher-rate landlord will pay 44% on rental profit, with mortgage interest relieved at only 20%. A company pays corporation tax at 19% on profits up to £50,000 and deducts interest as an ordinary cost. On paper the gap is wide. In practice it depends on what you need from the income.
Two ways to own
- Rates of 24%, 44% or 49% from April 2027
- Mortgage interest relieved at 20%
- Profits are yours to spend, taxed once
- Simpler, cheaper to run
- Corporation tax of 19% to 25%
- Mortgage interest deducted in full
- Dividends taxed again at 10.75% or 35.75%
- Accounts, filings and higher lending costs
When a company tends to work
A company suits landlords who will reinvest profits to buy more property, who have significant borrowing, and who are higher-rate taxpayers already. It is less attractive for someone who needs the rent to live on, because each pound taken out as a dividend is taxed again.
The cost of moving
Transferring properties you already own into a company is treated as a sale at market value. That can mean Capital Gains Tax on the growth so far and Stamp Duty Land Tax, including the 5% surcharge, on the transfer. Some reliefs exist for portfolios run as a genuine business, but they have strict conditions.
For many landlords the answer is to keep existing properties and buy new ones in a company. Talk to us, and to a mortgage broker, before you decide.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.