Buy-to-Let Mortgages, Tax and Structure in the UK

10 Questions Landlords Ask – and Why Rate-Only Advice Falls Short

In the UK buy-to-let market, interest rates get the headlines, but tax and structure determine whether an investment actually works.

As mortgage brokers who are also accountants, we see a recurring problem. Many landlords are given a competitive interest rate, but are not shown how that rate interacts with:

• Their personal tax bracket
• Section 24 mortgage interest restrictions
• Ownership structure
• Stamp Duty exposure
• Long-term portfolio and inheritance plans

This is not a criticism of the mortgage market. It is simply a reality. Mortgage brokers cannot advise on tax, and accountants do not arrange mortgages. When advice is fragmented, landlords make decisions in isolation.

At WIS Mortgages, we work closely with WIS Accountancy, a Chartered Management Accountancy practice, allowing us to address the questions landlords actually struggle with.

Below are the 10 most common questions we are asked by UK landlords, particularly those in London, Surrey, Kent and across England.

1. Section 24: how much am I really losing?

Section 24 affects landlords who own property personally and are:

• Higher-rate taxpayers (40%)
• Additional-rate taxpayers (45%)
• Or pushed into a higher tax band due to rental income

Basic-rate taxpayers may see limited impact, but for higher earners, Section 24 can significantly reduce net returns.

The correct starting point is a break-even calculation, not assumptions. Until that point is understood, no meaningful decision can be made about structure.

2. Should I buy personally or through a limited company?

This depends on more than today’s tax band.

Key considerations include:

• Future income growth
• Portfolio expansion plans
• Whether profits will be retained or extracted
• Long-term tax efficiency

Limited companies are not suitable for everyone, but for many landlords they offer greater predictability and scalability.

3. Can I move personally owned properties into a limited company?

In most cases, this involves selling the property to the company, which can trigger:

• Capital Gains Tax
• Stamp Duty Land Tax (including the additional rate)

Some landlords may qualify for Incorporation Relief (Section 162), but this depends on how the property activity is structured. Not all landlords qualify, and poor advice here can be costly.

4. Are limited company buy-to-let mortgages more expensive?

Historically, yes.

Limited company buy-to-let rates are often:

• Around 1% to 1.5% higher than personal rates

However, competition from major UK lenders such as Barclays and BM Solutions (Lloyds Banking Group) has increased, and pricing continues to improve.

Importantly, a higher rate does not automatically mean a worse outcome once tax is considered.

5. What is an SPV and why do lenders prefer it?

An SPV (Special Purpose Vehicle) is a limited company set up solely to hold property.

Lenders often prefer SPVs because they:

• Separate property from trading activities
• Reduce complexity
• Improve underwriting clarity

Common SIC codes include 68100 and 68209, though lender requirements vary.

6. How do I take money out of a property company efficiently?

There is no universal answer.

Depending on circumstances, options may include:

• Director’s loans
• Dividends
• Inter-company lending
• Family payroll (where appropriate)

This is where accountant-led advice is essential. The wrong approach can result in unnecessary tax.

7. Can I involve my children or plan inheritance early?

Yes. Many landlords use alphabet (ABC or ABCC) share structures to allow:

• Flexible dividend planning
• Gradual wealth transfer
• Long-term family planning

This is particularly relevant for landlords building portfolios rather than planning short-term exits.

8. Does a limited company make sense for basic-rate taxpayers?

Sometimes.

If you plan to:

• Hold one or two properties only
• Keep income stable
• Avoid complexity

Personal ownership may be appropriate.

However, if portfolio growth is planned, setting up a limited company earlier can avoid costly restructuring later.

9. What additional costs should landlords budget for?

Running a property company involves costs such as:

• Accountancy fees
• Corporation Tax returns
• Annual accounts
• Director self-assessments
• Payroll and compliance where applicable

These costs must be included in any meaningful comparison.

10. How does Making Tax Digital affect landlords from 2026?

From April 2026, landlords earning over £50,000 must submit quarterly reports to HMRC.

This increases compliance requirements, but also improves financial transparency and can support future mortgage applications.

Key Findings

• The lowest interest rate does not always deliver the best outcome
• Section 24 significantly impacts higher-rate taxpayers
• Limited companies dominate modern buy-to-let strategies
• Stamp Duty planning can materially affect affordability
• Mortgage and tax advice must work together
• Long-term planning matters more than short-term savings

Frequently Asked Questions (FAQs)

Is Section 24 still relevant in 2026?

Yes. Section 24 continues to affect higher-rate taxpayers who own property personally.

Are limited company buy-to-let mortgages harder to get?

No. Lender choice has improved significantly, particularly for SPVs.

Do I always need an SPV?

No, but many lenders prefer SPVs as they simplify underwriting.

Can I use my trading company to buy property?

Yes, but lender acceptance varies and structure matters.

Is a limited company worth it for one property?

Sometimes, but it depends on long-term plans and tax position.

Can landlords still plan inheritance through property companies?

Yes, share structures can be used to support inheritance planning.

Final Thought

A mortgage is not just a product.

It is part of a wider financial strategy.

Landlords who focus purely on interest rates often discover too late that tax and structure determine the real outcome.

Your home or property may be repossessed if you do not keep up repayments on your mortgage.