Published: 9th Jun, 2025
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How Much Stamp Duty Do Businesses Pay?
As the owner or decision-maker of a limited (Ltd) company, knowing the amount of stamp duty you’ll pay when purchasing a property is essential for budgeting. So, how much stamp duty do businesses pay?
The short answer? You’ll pay a 5% surcharge on top of the standard residential property stamp duty rate. These costs apply to every property your company purchases, even the first one.
Let’s look at the particulars.
What we’ll cover here
It’s worth noting that Ltd company stamp duty rates inflate in line with property prices. According to official government data, the top rate of stamp duty for residential properties is 17%. Here’s what the limited company stamp duty numbers look like at a glance:
| Property price | Ltd company stamp duty rate | Ltd company buy-to-let (BTL) stamp duty rate |
|---|---|---|
| £0 to £250,000 | 0% | 5% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 to £1.5m | 10% | 15% |
| Over £1.5 million | 12% | 17% |
FYI: If you buy a non-residential (commercial) property through your limited company, you won’t have to pay the 5% surcharge.
This stamp duty limited company charge applies to companies or partnerships with at least one corporate partner who actively participates in investment schemes. This standard flat rate of 15% is charged on property purchases over £500,000.
There’s no getting away from the fact that this is a fairly sizable cost. But you’ll be pleased to know that there are some possible reliefs available.
These apply if the property in question is utilised within a property rental business or bought by a property developer or trader. Generally speaking, most property investors and developers pay the higher rate of stamp duty, rather than the 15% rate.
A real-world scenario
If one of your company directors buys a five-bedroom property to live in, you’d be expected to pay 15% stamp duty in addition to Annual Tax On Enveloped Dwellings (ATED) charges.
But if your company buys the same property to house your employees, the 15% flat rate doesn’t apply. In this case, you’d pay the 5% Ltd company surcharge on top of standard residential stamp duty rates.
Yes, if you personally own properties and you wish to transfer or incorporate them into your limited company, you’ll be subject to stamp duty charges. You’ll also have to pay capital gains tax.
You’ll have to pay stamp duty based on your property’s market value at the date of transfer rather than its original purchase value.
Oh, and it’s important to understand that these costs apply whether you pay in cash or shares or if the property is ‘gifted’ to your limited company.
Can I get any reliefs?
Some reliefs are available. If you run a property business and are married or in a civil partnership, a registered partnership, or a limited liability partnership (LLP), you may be eligible for S15 land and buildings SDLT relief when incorporating a property.
Before you decide whether to purchase properties through your limited company, it’s worth weighing up the pros and cons. Let’s explore.
The pros
You could save on your tax bill
First of all, buying properties through a limited company could make your tax affairs more efficient. If you’re a higher rate tax payer, buying property though a limited company means that you won’t have to pay income tax and national insurance (NIC) on your rental income profits. Instead, you’ll be required to pay 19 to 25% Corporation Tax on your property.
This may not make a great difference if you’re a basic rate tax payer, but if you currently pay 40 to 45% income tax, buying properties through your limited company could be an attractive option. This also rings true if you’re a basic rate tax payer who currently hovers below the higher threshold.
For example, we recently had a client who earned a little under the higher tax rate threshold. She was a self-employed graphic designer and wanted to start buying property privately over 10 years for her retirement. She owns the property she lives in outright.
After calculating her budget with us, she decided that buying a two-bedroom terrace at around £150,000 for buy-to-let purposes was feasible. She also projected that her gross rental income would be around £10,000 per year.
Rather than buying the house privately, she set up a limited company so she’d be eligible to pay 19% corporation tax rather than pushing her personal income over the basic rate threshold. Not only did she save money on her initial purchase, but she’ll also be able to buy future properties through her limited company more tax efficiently.
You may be able tax deduct your mortgage interest
Another perk of buying properties through a limited company is the fact that you can write off your mortgage interest as a business expense. According to Section 24 of The Finance Act 2015, you can claim the interest as a business expense against your profits to minimise your Corporation Tax bill—enjoying a significant level of savings in the process.
As a limited company, there are other potential tax deductions you can make, including costs associated with property maintenance, repairs, and certain property taxes. But, while this may be the case, every situation is slightly different and you should always check the eligibility of certain deductions before making them,
As advised by UK Property Accountants:
“It is crucial to note that not all expenses are deductible solely because they are legally required. Similarly, companies cannot deduct stamp duty expenses from their income for Corporation Tax purposes, but it is considered as part of purchasing the property. It is essential to be aware of this, as incorrectly deducting expenses may lead to penalties and fines imposed by HMRC.”
You may be able to claim inheritance tax relief
If you own properties through a limited company, your estate beneficiaries could claim Business Relief and drive down the amount of Inheritance Tax payable on your portfolio.
On the flip side, if you own investment properties on an individual basis and want to pass them onto your estate, your beneficiaries could end up paying a colossal 40% in inheritance tax. These costs apply on the value of properties that sit above the £325,000 threshold.
The cons
Mortgage options are less favourable and more limited
When buying a property through a limited company, you have reduced financial liability, which can make you a higher-risk borrower in the eyes of lenders. Typically, this means you’ll have fewer mortgage products to choose from, rates may be less favourable, and you may have to pay a higher deposit.
Also, in some cases, you may have to sign a guarantee to accept personal liability for mortgage repayments just as you would if you were buying the property personally.
The administration and red tape is more intensive
Running and buying properties through a limited company also comes with its fair share of (often complex) administrative requirements. These include:
- Filing your annual accounts and a confirmation statement with Companies House every year
- Preparing a Company Tax Return for HMRC to calculate your Corporation Tax bill
- Arranging a Self Assessment tax return for HMRC to declare any untaxed income you receive from your company, including dividends or expenses
- Operating on a PAYE basis if you intend to pay yourself a director’s salary
- Issuing dividends to supplement your salary income if you want to take profits from the company in the most tax-efficient way possible
If you buy and run properties as an individual, you can declare your income and profits directly through self-assessment, making the process quicker, smoother, and less admin-heavy.
You’ll have to pay stamp duty surcharges
Circling back to stamp duty for a moment: as a limited company, you’ll be required (as mentioned), to pay a 5% surcharge on top of standard residential rates. These costs can add up and you should always consider whether your specific situation, set up or investment goals justify these added fees.
Disclaimer
This advice is based on our experience and knowledge as a property investment specialist and is here to help guide your decisions. However, we’re not legal advisors or tax experts. You should always get assistance from registered tax or legal professionals before making any big commitments or decisions.
Whether you’re looking to become an individual buy-to-let landlord or run your operation as a limited company, we hope the advice we’ve detailed here leads you to an informed decision.
Motivations aside, if you’re looking for a prime property investment opportunity that you won’t find on the likes of Zoopla or Righmove—you’re in the right place.
We have below market value property investment opportunities to suit all aspirations and budgets. If you need investment advice and guidance tailored to your needs, our team of in-house experts will be happy to guide you through the process. Don’t delay…
If you’re a higher rate tax payer, purchasing buy-to-let properties through a limited company could be an attractive option as you can deduct your mortgage interest costs as a business expense. If you’re looking to buy and run multiple properties, operating through a limited company also makes sense as this type of set up comes with features that are more favourable to long-term business owners.
As a limited company, you’ll be expected to pay a 5% surcharge in addition to standard residential stamp duty rates, which increase according to the value of the property you’re purchasing. This surcharge doesn’t apply if you’re buying a commercial property through a limited company.
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