Stamp Duty for Limited Companies

If you’re considering purchasing property through a limited company—or transferring existing properties into one—stamp duty land tax (SDLT) will almost certainly apply. The rules are stricter for companies, especially after recent government crackdowns, but there are still scenarios where reliefs can reduce or even defer the tax.

This article explains how stamp duty works for limited companies post-October 2024 budget, what rates apply, whether a buy-to-let company is still worth it, and whether SDLT can ever be reclaimed.

What Is Stamp Duty?

Stamp Duty Land Tax (SDLT) is a tax payable to HMRC when property or land is purchased in England or Northern Ireland. Scotland and Wales have similar taxes (LBTT and LTT respectively), but the rules differ.

It’s calculated based on the purchase price of the property and applies whether the buyer is an individual or a company. However, limited companies pay higher rates, and are subject to additional surcharges and restrictions.

How Much Stamp Duty Do Limited Companies Pay?

As of the October 2024 budget, limited companies buying residential property in the UK face:

• Standard SDLT rates (based on price brackets)

• A 3% additional rate surcharge (on all purchases, even the first)

• Potential 15% flat rate if the property is over £500,000 and isn’t used for qualifying business purposes

Example – Buy-to-let via Ltd company (residential):

If your company buys a residential property for £400,000, it would face:

• Standard SDLT: £10,000

• 3% surcharge: £12,000

• Total SDLT: £22,000

SDLT Brackets for Companies (Residential, England):

Up to £250,000: 3%

£250,001 – £925,000: 8%

£925,001 – £1.5 million: 13%

Over £1.5 million: 15%

What Is the 15% Corporate SDLT Rate?

This special flat rate of 15% SDLT applies when a limited company buys a residential property worth more than £500,000 and doesn’t intend to use it for a genuine property rental business.

This anti-avoidance rule targets companies trying to shelter high-value properties from Inheritance Tax or Income Tax.

Example:

Company buys a £1 million residential property and leaves it empty.

• 15% SDLT = £150,000 due upfront.

However, if the property is rented to tenants and part of a genuine property business, relief is available and standard SDLT rates (plus 3%) apply instead.

What About Commercial Property?

The SDLT rules are far more favourable for commercial property:

• No 3% surcharge

• No 15% flat rate

• Lower bands and rates overall

Commercial SDLT Rates (for companies or individuals):

Up to £150,000: 0%

£150,001 – £250,000: 2%

Over £250,000: 5%

This makes limited companies ideal vehicles for buying offices, warehouses, shops, and mixed-use buildings where tax burdens are lower and reliefs more accessible.

Do I Pay Stamp Duty When Incorporating My Properties Into a Company?

Yes, in most cases.

When you transfer a personally owned property into a limited company—even if you own the company—HMRC treats this as a market value sale. That means:

• The company pays SDLT based on full market value

• You may pay Capital Gains Tax (CGT) personally on any gain

However, SDLT relief is possible under partnership rules, but only if:

• You operate a genuine property business (not just passive rentals)

• There are at least two partners actively involved in the business

• The business is being incorporated into a company that takes over its assets and liabilities

This is a narrow relief and must be professionally planned to avoid rejection.

Are There SDLT Reliefs or Strategies for Limited Companies?

Yes, but they’re limited and depend on circumstances:

1. Multiple Dwellings Relief (MDR): If your company buys a block of flats or more than one dwelling in a single deal, MDR may reduce the SDLT bill.

2. Six or More Rule: If you buy six or more residential properties in a single transaction, the deal is taxed under commercial SDLT rates—a major saving.

3. Incorporation Relief: Not a direct SDLT relief, but if structured properly, CGT can be deferred under Section 162 TCGA 1992 when incorporating.

4. Group Relief: Applies when transferring property between companies within the same group, under qualifying conditions. No SDLT applies in those cases.

5. Buying via Pension Scheme: A SSAS or SIPP can buy commercial property without SDLT in some scenarios, but cannot own residential property.

Can You Claim Back Stamp Duty as a Limited Company?

You cannot directly claim back SDLT once paid, but:

• SDLT is a business expense and can be included in the base cost of the property for future tax calculations

• It may reduce Corporation Tax on profits if treated as part of acquisition costs (subject to accounting treatment)

• If SDLT was overpaid in error, a refund claim can be submitted within 12 months of filing

There’s no “rebate” for simply holding property in a company—once SDLT is paid, it’s final unless you qualify for a correction or reclaim.

Should I Still Buy a Buy-to-Let Using a Limited Company After October 2024?

Despite the SDLT burden, limited companies still make sense for many landlords because:

• Mortgage interest is fully deductible

• Corporation Tax is lower than higher rate personal Income Tax

• Profits can be retained and reinvested tax efficiently

• Estate planning is simpler with share transfers than property deeds

However, if you only plan to own one or two properties, and especially if you’re a basic-rate taxpayer, the added cost and admin of a company might outweigh the benefits.

Final Thought

Stamp Duty is one of the biggest costs when investing in property through a limited company, and it hits upfront. Post-October 2024, the rules are still tough on residential property, especially with the 3% surcharge and potential 15% corporate rate. But there are ways to soften the blow—especially for commercial property or larger deals.