Can I Sell My House to My Limited Company?

The challenges of being a landlord are vast. From sourcing tenants, to repairs and maintenance, to the dreaded landlord rental income tax, it can all be a little complex and, at times, stressful. One option you could consider, in the hope of lessening the burden, is to sell your house to your limited company. Why? Because the forthcoming changes to the income tax on rental properties see rates rise to 22% for basic rate taxpayers, 42% for higher rate taxpayers and 47% for those on additional rates, paying 25% corporation tax instead would be much more favourable.

Unfortunately, as with all things financial, it isn’t always straightforward, so in this blog, we explain how you can sell your house to your limited company, the costs it involves and any advantages or disadvantages it brings.

In summary:

• You can sell your house to your limited company
• You won’t pay income tax on rental income
• You will pay corporation tax
• Stamp duty will apply
• Mortgages may be limited
• ERC (early repayment charges) may apply

Why would I sell my house to my limited company?

Selling your house to your own limited company may seem strange, especially to new landlords. Whether you or your company own the property, it’s ultimately still yours, so why change things? It’s a point well raised, but since 2020, landlords have been unable to use mortgage payments as a tax deduction, meaning that the mortgage interest would eat into the revenue the property generates. The introduction of this legislation means that landlords have to pay income tax on all earnings from the property.

Putting the home in a limited company makes the company the homeowner rather than the individual; when this happens, different tax rules apply. With increases in landlord rental income tax due in 2027, it can be seen as a smart move. Although it should be understood that an assortment of charges will apply, and this is not a transfer of the property, it’s a sale, just like when you buy a house for yourself.

How to sell my house to my limited company?

You can think of selling your house to your limited company in much the same way as when you buy or sell a property for yourself. There are, though, some finer details you need to pay attention to. You won’t just be a landlord, you’ll be a business owner, and this means filing accounts, registering the business and ensuring you meet all the legal obligations that come with running a business.

If you already own a company, you may be able to use that business to take ownership of the property, but this can get complex and sometimes make obtaining a mortgage difficult. We’ll assume you do not own any other businesses for the rest of this article:

Register the new company

Set up your limited company so it can be the owner of the property. You’ll need to put it under one or more of the following SIC codes:

• 68100 – Buying and Selling of Real Estate
• 68209 – Other Letting and Operating or Own or Leased Real Estate
• 68320 – Management of Real Estate

Hire a conveyancer

There can be a tremendous amount of legal work to complete, and to ensure full compliance and the speediest completion, hire a professional. They will handle all the legal aspects of the sale.

Have the house valued

No matter how tempting it may be to sell your house to yourself cheaply, do NOT do this. This could be seen as an attempt to reduce the amount of tax that should be paid. You should get the property valued by a RICS valuer and sell the house at market value.

Apply for a mortgage

If your company already has funds available to buy the house with cash, things can move quite fast. In most cases, though, a mortgage is required. You may need a specialist mortgage product, and some lenders may be reluctant to lend the funds to a company with no trading history. It would be advisable to seek impartial advice from a mortgage broker first.

Complete the transaction

Once the mortgage is in place (if required), you can proceed with selling your house to your company. Ideally, you should ensure all aspects of the sale and purchase are completed on the same day so you can pay yourself immediately.

What taxes and charges apply when selling my house to my limited company?

Selling your house to your limited company may sound complicated initially, but it’s important to remember that it’s the same as any other property transaction, with just a few changes.

Corporation tax

When your company owns the property, you’ll pay corporation tax rather than income tax. With corporation tax set at 25%, this is considerably lower than the current and proposed income tax rates landlords pay now and will be expected to pay from 2027.

Dividend tax

You’ll also pay tax on any dividends that you take from the company. As you’ll be a director, you’ll be able to take funds from the company, like a salary, but they will have varying levels of tax applied to them. This could be as high as 39.75%. There are tax-free allowances, but these should be clarified with an accountant.

Capital Gains Tax

Capital Gains Tax (CGT) will apply when you sell your house to your limited company as you are a “connected person”. This means you’ll need to pay tax on the difference between the original purchase price and the current sales price. How much you owe will be determined by your tax band. For 2025/26, the rates are set at 18% for those on the basic rate and 24% for those on the higher rate.

You might also be able to apply for incorporation relief. This will defer any CGT payments until the company is sold.

Stamp Duty

Stamp Duty Land Tax (SDLT) will be paid for by your limited company when it buys the property. The amount you pay will be determined by your circumstances and is calculated on the purchase price or market value of the property.

Early repayment charges

An early repayment charge (ERC) will be applied if there is an existing mortgage on the property you are selling. These can be substantial, especially if you are moving the house from individual to company ownership only a short time after starting a mortgage deal.

What are the advantages of selling my house to a limited company?

Selling your property to your limited company could be the perfect way to develop your business, save money and protect your credit score.

Tax savings

As we mentioned earlier, by paying corporation tax instead of income tax, you’ll be paying less tax overall. For high-rate payers, especially, this can represent a great saving.

Protect your credit score

It’s no longer you as an individual who owns the property; it’s your company. So, if any issues arise, your credit score and personal finances remain safe from harm.

Inheritance tax benefits

When you set up a company, you can list your family as directors. This can represent a saving when the IHT bill comes further down the line, as they will own the company rather than inherit the property.

Directors Loan Account

When you sell your property to your company at the market value, you could create a DLA, deduct the mortgage balance and then repay the loan amount to yourself tax-free.

What are the disadvantages of selling your house to your limited company?

As with anything that has advantages, there are disadvantages too. Selling your property to a limited company comes with a few drawbacks that may make you think it’s not the ideal option.

Expense

Of course, you’ll be saving money on tax, but you’ll still have to factor in arrangement fees, CGT, SDLT, Dividend tax and more. This could all get expensive, confusing and stressful.

Mortgage issues

Mortgages may not only be harder to obtain, but they might also come with rates much higher than what you were paying before.

Property loss

Whilst keeping a property in a company protects you from losing your personal cash, the property is linked to the company rather than you as an individual. This means that if your company were to go bust or be put under severe financial strain, you could lose your house to clear any debts.

Bridging loan costs

If you require a bridging loan to help finance the purchase, you’ll need to remain aware of the potential costs it involves. They are generally very high and could make a huge difference in the success of your transition to a limited company.

If you are a landlord and are unsure whether to sell your property to a limited company, seek professional advice first. If, though, you’ve decided the world of buy-to-let is no longer for you, speak to Bettermove. We will sell your property portfolio without you needing to spend a penny, enabling you to move onto new investment opportunities, clear debts, retire or support your family. With two routes to sale, we expedite the process so you can sell in as little as thirty days. Contact us today to find out more.