Three in four landlords now use limited companies for at least one property, indicating that it’s increasingly becoming the norm for new investors, a poll from GetGround shows.

Half (49%) of these landlords first invested via a limited company within the last 12 months, while two in five (42%) invested for the first time in the past one to three years.

Landlords have been using limited companies in growing numbers after the government removed mortgage income tax relief for those operating as an individual, replacing it with a tax credit.

Some 57% said the limited personal liability is a key benefit of incorporation, thus protecting themselves against the higher risk of missed rental payments in the current cost of living crisis. Meanwhile 57% used companies to enable co-investment among multiple people.

Moubin Faizullah Khan, chief executive of GetGround, said: “Industry data is creating an exciting picture of limited company adoption across the landlord community, but until now it’s not been entirely clear how many individual landlords are using limited companies and how extensively used they are among landlords’ portfolios.

“Our final poll for 2022 shows that awareness and adoption of incorporations is fast growing, and importantly, for the right reasons.

“Whether it’s affordability, protection against risk, financial viability or acting responsibly and transparently, incorporating your investments pays off. It is reasonable to expect that limited company adoption will continue to accelerate as we move into 2023.”

Limited companies are yet to be fully adopted by most investors, as 93% who use limited companies manage less than half their portfolio through companies.

Landlords who transfer ownership from an individual to limited company structure have to pay stamp duty again, so there’s a big incentive to leave those properties as they are.

However, four in five (78%) landlords have moved an investment property from personal ownership into a company structure after completion.

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Thanks for reading

Chris Dowty

CEO, Sourcing Investments

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