Should I Incorporate My Buy-to-Let? The 2026 Numbers

43% of all buy-to-let mortgage purchases in the UK now go through a limited company. That figure, from Paragon Bank's landlord research, was 7.5% in 2018. The shift is structural, not a trend.

The reason is not complicated. Section 24 has made personal ownership noticeably more expensive for higher-rate taxpayers, and the maths increasingly favours a company structure for anyone building or growing a portfolio.

But "it works for 43% of buyers" does not mean it works for you. The right answer depends on your tax position, your exit strategy, and whether you are starting fresh or moving existing properties across. Those are very different problems.

This article walks through the actual 2026 numbers so you can make that call with evidence rather than instinct.

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How Buying Through a Limited Company Works

If you are starting fresh rather than moving properties you already own, the process has five parts.

1. Set up the company. You register a new limited company with Companies House, giving a registered address and a SIC code that describes what it does. Most landlords use a company that only holds property, known as an SPV. Specialist lenders look for property SIC codes such as 68100 (buying and selling of own real estate) or 68209 (other letting and operating of own or leased real estate).

2. Arrange a limited company mortgage. The company is the borrower, not you. Lenders still look closely at the directors, and most will ask you to sign a personal guarantee. Rates tend to sit a little above personal-name deals, which the mortgage section below covers.

3. The company buys the property and pays Stamp Duty. A company buying a home pays the higher rates for additional dwellings on any residential purchase, even if it is the first property the company owns. That is 5 percentage points on top of the standard rates.

4. Rent goes to the company. The company pays the mortgage and running costs, deducts the full mortgage interest, and pays corporation tax on what is left. Section 24 does not apply.

5. You take money out, and it is taxed again. Salary or dividends paid to you are taxed in your own hands. Leaving profits in the company to fund the next deposit avoids that second layer, which is why the decision framework later asks whether you need the income now.

On top of that, the company files annual accounts and a confirmation statement with Companies House, plus a corporation tax return with HMRC, every year. Budget for an accountant from the start.

The Section 24 Problem: A Worked Example

Section 24 of the Finance Act 2015 is the root cause of most incorporation conversations. It has been fully in effect since the 2020/21 tax year and will not be reversed.

Under the old rules, a landlord could deduct 100% of mortgage interest directly from rental income before calculating tax. Under the current rules, individual landlords receive a basic rate (20%) tax credit on their finance costs instead. That sounds similar. It is not.

Here is why it matters in practice.

Scenario: Higher-rate taxpayer, one property