Index of the Article:
The Audio Summary of the Key Points of the Article:
Understanding the Basics – Can You Sell Your House to Your Limited Company in the UK?
Selling your house to your limited company is not only legally possible but also a strategy many UK landlords and property investors consider for tax efficiency. However, this process isn’t as simple as transferring ownership—it is legally treated as a sale, meaning that taxes, mortgage conditions, and other financial aspects must be carefully evaluated.
Now, we’ll break down the key legal and financial considerations, using the most up-to-date UK tax regulations (valid up to January 2025). We’ll also explain when it makes financial sense to sell your home to your company and when it might not be the best move.
What Happens When You Sell Your House to Your Limited Company?
Selling your house to your limited company is not a straightforward transfer—it is legally considered a market-value sale. This means that even if you own the company, the transaction must be at fair market value and will have tax implications such as:
Key Considerations | What It Means |
Stamp Duty Land Tax (SDLT) | The company must pay SDLT on the purchase price. |
Capital Gains Tax (CGT) | If your house has increased in value, you may have to pay CGT when selling. |
Mortgage Implications | Not all lenders allow the transfer—many require commercial loans. |
Accounting & Reporting | The transaction must be recorded in both personal and company tax filings. |
Tax Considerations: What You Need to Know
When selling a property to your limited company, two major UK taxes come into play:
Capital Gains Tax (CGT)
Stamp Duty Land Tax (SDLT)
Capital Gains Tax (CGT) – Do You Have to Pay?
If your property has increased in value since you bought it, you may have to pay Capital Gains Tax when selling it to your company.
For the 2024-2025 tax year, CGT rates for residential property are:
18% for basic-rate taxpayers (if the gain keeps you within the basic rate band).
28% for higher and additional-rate taxpayers.
💡 Example:
You bought your house in 2015 for £200,000.
In 2025, your company buys it for £300,000.
Your gain is £100,000.
If you're a higher-rate taxpayer, you’ll pay 28% on £100,000, meaning a £28,000 tax bill.
👉 Exemptions & Reliefs:
Private Residence Relief (PRR): If the property is your main home, you may get full or partial CGT relief.
Lettings Relief: If you rented the property out at any point, additional relief might apply.
Stamp Duty Land Tax (SDLT) – How Much Will Your Company Pay?
Your limited company must pay SDLT on the property’s market value, even if you personally own it.
📌 2024-2025 SDLT Rates for Companies:
Property Value | SDLT Rate |
Up to £250,000 | 3% |
£250,001 - £925,000 | 8% |
£925,001 - £1.5 million | 13% |
Over £1.5 million | 15% |
💡 Example:
If the sale price is £300,000, SDLT is 8% on the portion above £250,000.
SDLT due = (3% on £250,000) + (8% on £50,000) = £10,500.
⚠️ Additional Considerations:
SDLT surcharge for additional properties: If your company owns multiple properties, it might face an additional 3% charge.
Reliefs: Some companies (like SPVs) may qualify for SDLT exemptions.
Mortgage Challenges – Can Your Company Buy Your Home?
If your property is mortgaged, selling it to your company may be tricky. Most personal mortgage lenders do not allow direct transfers to a limited company. Instead, you may need:
To repay the existing mortgage before the sale.
To obtain a commercial mortgage in the company’s name.
📌 Key Mortgage Differences:
Factor | Personal Mortgage | Commercial Mortgage |
Interest Rates | Typically lower (2-5%) | Higher (4-7%) |
Deposit Requirement | 10-25% | 25-40% |
Lenders Available | Mainstream banks | Specialist lenders |
Why Do People Sell Their Houses to Their Companies?
Some UK landlords and property investors choose this strategy for tax efficiency, particularly in light of Section 24 tax changes, which restrict mortgage interest relief for personal landlords.
Potential Benefits:
✔️ Lower Corporation Tax: Limited companies pay 19% corporation tax (dropping to 18% in future years) compared to personal tax rates of 40-45% for high earners.
✔️ Full Mortgage Interest Deduction: Unlike individuals, companies can deduct mortgage interest as an expense.
✔️ Estate Planning: Helps pass down property without inheritance tax issues.
The Financial Pros and Cons of Selling Your House to Your Limited Company
In Part 1, we covered the basics of selling your house to your limited company, including tax considerations, mortgage implications, and why some landlords and investors choose this route. Now, let’s get into the financial details—the real costs and benefits of this strategy.
Many UK taxpayers consider transferring property to a limited company because of potential tax savings, but the decision isn’t always straightforward. This part will provide a clear cost-benefit analysis, comparing different scenarios, and explaining when this strategy makes sense—and when it doesn’t.
Breaking Down the Financial Costs of Selling Your House to Your Limited Company
Before making the transfer, you need to consider several one-time and ongoing costs. Below is a detailed cost breakdown for a property worth £300,000.
1. Capital Gains Tax (CGT) on the Sale
As mentioned in Part 1, if your property has increased in value, you may owe CGT when selling to your company.
Example CGT Calculation (2024-25 tax year)
Property Purchase Price (2015) | Property Sale Price (2025) | Capital Gain | CGT Rate (Higher Rate Taxpayer) | CGT Payable |
£200,000 | £300,000 | £100,000 | 28% | £28,000 |
✔️ CGT Reliefs That Could Reduce Your Bill:
Private Residence Relief (PRR): If this was your main home, part of the gain may be exempt.
Lettings Relief: If the property was rented out, you might qualify for additional relief.
⚠️ Hidden cost: If you sell at a loss, you cannot claim this loss against company profits—it only offsets other personal capital gains.
2. Stamp Duty Land Tax (SDLT) – What Will Your Company Pay?
Your company must pay SDLT on the full property value, even though you own both the company and the property.
Example SDLT Calculation (2024-25 tax year)
Property Value | SDLT Rate for Companies | SDLT Payable |
Up to £250,000 | 3% | £7,500 |
£250,001 - £300,000 | 8% | £4,000 |
Total SDLT Due | — | £11,500 |
✔️ Possible SDLT Exemptions:
If transferring between connected businesses, you might reduce SDLT costs using Group Relief (subject to HMRC approval).
Companies purchasing six or more properties at once may qualify for a non-residential SDLT rate, which is often lower.
3. Legal & Professional Fees
When selling to your company, legal and administrative costs apply.
Service | Estimated Cost (2024-25) |
Property Valuation | £250 - £600 |
Solicitor/Conveyancing Fees | £800 - £1,500 |
Land Registry Fees | £200 - £400 |
Accountant Fees (for tax structuring) | £500 - £2,000 |
Total Estimated Fees | £1,750 - £4,500 |
✔️ Ways to Reduce Costs:
Some lenders offer "packaged" services with legal and valuation fees included.
If selling multiple properties, bulk transactions can reduce conveyancing costs.
4. Mortgage Implications – Will Your Interest Rates Increase?
If your property has a personal mortgage, selling to your company means you’ll likely need a new commercial mortgage.
Personal vs. Commercial Mortgage Comparison (2024-25 Rates)
Factor | Personal Mortgage | Commercial Mortgage |
Interest Rate | 2.5% - 4% | 4% - 7% |
Deposit Required | 10% - 25% | 25% - 40% |
Loan Term | 25 - 30 years | 10 - 25 years |
✔️ Impact on Monthly Costs:A £200,000 mortgage at:
3% (personal mortgage) = £843/month
6% (commercial mortgage) = £1,288/month
⚠️ Key risk: If your company fails to make mortgage payments, your personal credit score is unaffected, but the company could lose the property.
The Potential Financial Benefits of Selling to Your Limited Company
While the upfront costs are high, the long-term tax benefits could make this move worthwhile.
1. Corporation Tax Savings vs. Personal Tax on Rental Income
Since 2017 (due to Section 24 tax changes), landlords with personally owned properties can no longer deduct mortgage interest fully. Limited companies, however, can still deduct mortgage interest as a business expense.
Example Tax Savings for a Higher-Rate Taxpayer (2024-25)
Scenario | Personally Owned | Limited Company Owned |
Annual Rental Income | £20,000 | £20,000 |
Mortgage Interest (75% LTV @ 5%) | £7,500 | £7,500 |
Taxable Income | £20,000 (No deduction) | £12,500 (Interest deducted) |
Income Tax (40% on £20k) | £8,000 | £2,375 (19% Corp Tax) |
Tax Savings (Per Year) | £0 | £5,625 |
✔️ Key Benefit: Companies pay corporation tax (19%) instead of higher-rate personal tax (40%).
⚠️ However, withdrawing profits from the company means additional dividend tax applies.
2. Long-Term Capital Gains Tax (CGT) Benefits
If you personally own a rental property and sell it in the future, you’ll pay up to 28% CGT on the gains.
If your company sells it later, it pays only 19% corporation tax on the gain. This could save thousands of pounds, especially for long-term investors.
✔️ Potential Loophole: If you never sell, but instead pass shares of the company to family members, you can reduce inheritance tax exposure.
Who Should and Shouldn’t Sell to a Limited Company?
When It Makes Sense
✅ You own multiple rental properties and want to reduce tax.
✅ You plan to buy more properties under the company structure.
✅ You don’t need to withdraw profits immediately (to avoid dividend tax).
✅ You have high personal income (40-45% tax bracket).
When It’s Not Worth It
❌ You own only one property and don’t plan to expand.
❌ Your mortgage interest is already low, making tax savings minimal.
❌ You plan to sell soon, meaning high SDLT and CGT costs outweigh benefits.
How to Sell Your House to Your Limited Company – A Step-by-Step Guide
In the previous sections, we covered the tax implications, financial benefits, and risks of selling your house to your limited company. Now, let’s focus on the practical steps involved in completing the transaction.
Selling a property to your company follows a structured legal process, which includes valuation, mortgage arrangements, tax filings, and legal paperwork. Mistakes in this process can lead to unexpected tax bills, mortgage complications, or even rejection by HMRC. This section provides a detailed, step-by-step guide to help you navigate the process efficiently.
Step 1: Determine If Selling to Your Company Is the Right Move
Before proceeding, you should conduct a full financial and tax analysis to ensure that selling your house to your limited company is the right decision. This includes:
Calculating the total tax liability (Capital Gains Tax, Stamp Duty, and Corporation Tax).
Comparing personal mortgage rates vs. commercial mortgage rates.
Considering long-term rental income and future sale strategies.
Understanding dividend tax implications when withdrawing profits from the company.
At this stage, consulting a tax advisor or accountant is highly recommended. A professional can run projections based on your financial situation to determine if the transfer makes sense.
Step 2: Obtain a Property Valuation
Because the sale must be at market value, you need an independent valuation to avoid potential scrutiny from HMRC.
Hire a RICS (Royal Institution of Chartered Surveyors) registered valuer to provide an official valuation.
If your company underpays, HMRC may treat the difference as a benefit in kind, leading to additional tax charges.
Step 3: Check Mortgage Requirements
If your property has a mortgage, you must check whether your lender allows the sale. In most cases, you will need to:
Pay off the existing mortgage before transferring ownership.
Obtain a commercial mortgage in the name of your company.
Some mortgage lenders allow transfers to limited companies but may impose higher interest rates and stricter lending criteria.
Deposit requirement: Typically 25 to 40 percent for a company mortgage.
Interest rates: Higher than personal mortgages, often between 4 to 7 percent.
Loan terms: Shorter than personal mortgages, often 10 to 25 years.
If your company cannot secure financing, the transaction may not be possible unless you purchase the property with company funds.
Step 4: Appoint a Solicitor for the Legal Transfer
The legal process is similar to a standard property sale. You will need a conveyancing solicitor to handle:
Drafting the sales contract between you and your company.
Ensuring compliance with HMRC valuation rules.
Handling the Land Registry transfer of ownership.
Submitting Stamp Duty Land Tax (SDLT) filings.
The legal fees typically range from £800 to £1,500, depending on the complexity of the transfer.
Step 5: Notify HMRC and File Taxes Correctly
The transaction must be properly reported to HMRC. The key tax filings include:
Capital Gains Tax (CGT) Filing
If the property has increased in value since you bought it, you must report and pay CGT within 60 days of completion.
Use HMRC’s online CGT reporting system to declare the sale.
Stamp Duty Land Tax (SDLT) Filing
Your company must file an SDLT return and pay the tax within 14 days.
If you miss this deadline, penalties and interest charges will apply.
Corporation Tax Reporting
The property purchase must be recorded in your company’s annual accounts.
Any rental income must be reported in your company’s Corporation Tax return.
Keeping accurate records is crucial in case HMRC audits the transaction.
Step 6: Transfer Ownership with the Land Registry
Once the sale is complete, your solicitor will register the new ownership with the UK Land Registry.
This process usually takes four to eight weeks.
Once completed, your company will receive a new title deed confirming ownership.
If the property was previously mortgaged, the land registry records must also be updated to reflect the new lender (if applicable).
Common Mistakes to Avoid
1. Selling Below Market Value to Reduce Taxes
HMRC requires arm’s-length transactions, meaning the sale must be at fair market value. If your company underpays, HMRC may:
Treat the difference as a gift, triggering additional tax liabilities.
Impose penalties for tax evasion if it considers the valuation artificially low.
2. Overlooking Mortgage Terms
Many landlords assume they can simply transfer their mortgage, but most personal mortgage lenders do not allow transfers to a company. Always check lender policies before proceeding.
3. Ignoring Dividend Tax When Withdrawing Profits
Even if selling to a limited company saves tax initially, you could face dividend tax when withdrawing rental profits. As of 2024-25:
Basic-rate taxpayers pay 8.75 percent on dividends above £500.
Higher-rate taxpayers pay 33.75 percent.
Additional-rate taxpayers pay 39.35 percent.
4. Failing to Consider Long-Term Exit Strategies
If your company sells the property in the future, it will pay Corporation Tax on any gain. Unlike individuals, companies do not get a CGT allowance, meaning the entire gain is taxable.
Is Selling to a Limited Company the Right Move for You?
Selling a property to your own limited company can be beneficial for landlords with multiple rental properties, particularly those impacted by Section 24 mortgage interest relief changes. However, the upfront costs, tax implications, and mortgage restrictions must be carefully evaluated.
Before making a decision:
Consult a tax accountant to calculate the total tax impact.
Speak with a mortgage broker to determine if a commercial mortgage is possible.
Hire a solicitor to ensure compliance with HMRC rules.
For some property investors, the long-term tax efficiency and inheritance planning benefits outweigh the short-term costs. For others, the costs and administrative burden may not be worth it.
By understanding the full financial impact and legal requirements, you can make an informed decision that aligns with your property investment goals.
Summary of All the Most Important Points Mentioned In the Above Article
Selling your house to your limited company is legally allowed but must be done at market value, triggering potential Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT) liabilities.
CGT applies if the property's value has increased, with rates of 18 percent for basic-rate taxpayers and 28 percent for higher-rate taxpayers, unless exemptions like Private Residence Relief (PRR) apply.
Your limited company must pay SDLT on the purchase, with rates starting at 3 percent and increasing to 15 percent, depending on the property's value and ownership structure.
Mortgage lenders rarely allow direct transfers, so you may need to pay off the existing mortgage or secure a new commercial mortgage, which usually has higher interest rates and stricter requirements.
Limited companies benefit from full mortgage interest tax relief and a lower Corporation Tax rate (19 percent) on rental profits, but withdrawing funds may trigger dividend tax.
The legal transfer process requires a property valuation, conveyancing solicitor, Land Registry update, and tax filings with HMRC, all of which involve additional costs.
Selling to a limited company makes financial sense for landlords with multiple properties but may not be beneficial for individual homeowners with a single property, due to high upfront costs and tax implications.
FAQs
Can you live in a house owned by your limited company after selling it to the company?
A. Yes, you can live in a house owned by your limited company, but this may create a benefit-in-kind tax liability, as HMRC could treat it as a taxable employment benefit, requiring you to pay income tax and National Insurance on the deemed rental value.
Q2. Can your limited company sell the house back to you in the future?
A. Yes, your company can sell the house back to you, but this would be a separate transaction, requiring you to pay market value, and the company may incur Corporation Tax on any gains, while you could face Stamp Duty Land Tax (SDLT) costs.
Q3. Can you avoid Stamp Duty Land Tax (SDLT) when selling your house to your limited company?
A. SDLT is generally unavoidable unless specific reliefs or exemptions apply, such as group relief for parent-subsidiary transfers, but in most cases, SDLT must be paid at the applicable higher rates for companies.
Q4. Can your limited company rent the property back to you after buying it?
A. Yes, but it must be done at market rental rates, and you would need a formal rental agreement, plus the company would be liable for Corporation Tax on rental income, while you would pay income tax on dividends if profits are withdrawn.
Q5. Can you transfer ownership of your house to your limited company without selling it?
A. No, the transfer must be treated as a sale at market value, even if no money changes hands, which means you may still face Capital Gains Tax (CGT) and SDLT obligations.
Q6. Can your limited company buy a house from you if the company is new and has no trading history?
A. Yes, but most mortgage lenders require at least two years of financial history, meaning you may need to fund the purchase using company reserves or a director's loan.
Q7. Will your company need a special type of mortgage to buy your house?
A. Yes, most lenders require a commercial buy-to-let mortgage, which typically has higher interest rates and stricter lending criteria than a personal residential mortgage.
Q8. Can your limited company buy your house at a price below market value?
A. No, HMRC requires the transaction to be at market value, and an undervalued sale could result in tax penalties and a revaluation for tax purposes.
Q9. Can you use a director’s loan to finance your limited company’s purchase of your house?
A. Yes, you can lend money to your company via a director’s loan account, but if you later withdraw funds from the company, it could be subject to dividend tax or repayment terms.
Q10. Can you offset property-related expenses against Corporation Tax after selling your house to your limited company?
A. Yes, your company can deduct mortgage interest, repairs, management fees, and other property-related costs before calculating its Corporation Tax liability.
Q11. How does selling your house to your limited company affect your Inheritance Tax planning?
A. If your company holds the property, you can transfer company shares to beneficiaries instead of the property itself, which could be more tax-efficient for inheritance planning.
Q12. Will your personal credit rating be affected if your limited company buys your house?
A. No, but if the company takes out a mortgage and you provide a personal guarantee, your credit rating could be impacted if the company defaults.
Q13. Can your limited company buy your house if it is your main residence?
A. Yes, but you may lose Private Residence Relief (PRR), meaning any future sale by the company could attract higher Capital Gains Tax liabilities.
Q14. What happens if your limited company is dissolved after buying your house?
A. The property would typically be transferred to the Crown under Bona Vacantia, unless steps are taken to sell or transfer it before liquidation.
Q15. Can your company borrow against the property after buying it from you?
A. Yes, but lenders may have stricter criteria for limited company property loans, and borrowing may be subject to higher deposit and interest rate requirements.
Q16. Can your company claim VAT on the purchase if it is VAT-registered?
A. No, residential property purchases are exempt from VAT, so your company cannot reclaim VAT on the purchase price, though some building and renovation costs may be VAT-deductible.
Q17. Will you need an independent survey before selling your house to your limited company?
A. It is not legally required, but an independent RICS valuation is strongly recommended to comply with HMRC’s fair market value rules.
Q18. Can your company sell the house in the future without paying Capital Gains Tax?
A. No, companies pay Corporation Tax on any gain, and there is no Capital Gains Tax allowance for companies, unlike individuals who get an annual exemption.
Q19. Does selling your house to your company impact your personal home insurance?
A. Yes, the property will be owned by a company, so you will need landlord or commercial property insurance instead of personal home insurance.
Q20. Can your company buy your house in Scotland or Northern Ireland under the same rules?
A. Yes, but Land and Buildings Transaction Tax (LBTT) in Scotland and Land Transaction Tax (LTT) in Wales apply instead of SDLT, with different rates and exemptions.
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