Ltd status seized by young landlords

Private landlords are alive and well – and they are younger than you think. In 2024, analysis completed by the national accountancy group, UHY Hacker Young, found more than 3,000 landlords in the UK were aged 21 or younger. Collectively, they earned more than £66 million from their rental income. 

There was also a healthy number of landlords aged between 21 and 30 - a group of approximately 63,000 property investors sharing £786 million in rental income. Now, in 2025, there is new evidence to suggest younger landlords are wising up to tax implications.

Analysis of Companies House data published by PropertyReporter found a shift towards owning buy-to-let properties within a limited company framework and not as an individual – a trend that’s being propelled by those aged between 29 and 44.

Millennials, people born between 1981 and 1996, made up 50% of all new shareholders in buy-to-let limited companies established across England and Wales so far in 2025. The expected number of new limited companies set up specifically by Millennials to hold buy-to-lets is expected to be 33,395 – more than double the number registered in 2020.

It’s clear the number  of buy-to-let properties owned within a limited company structure is increasing, albeit slowly. For example, the most recent English Housing Survey found 6% of landlords operated as part of a company. Although small, the figure has risen 2% since 2018. The majority of landlords - 93% - let property as an individual, or as a group of individuals.

We could see the number of landlords using limited companies grow after this year’s Autumn Budget, to be announced on 26thNovember 2025. If personal tax thresholds are frozen at their current rates, more people – including landlords – could end up with higher tax bills. 

Presently, everyone in England and Wales can earn up to £12,570 tax free. Basic rate tax at 20% is applied to income between £12,571 to £50,270, while higher rate tax of 40% is applied to the portion of income between £50,271 to £125,140. An additional rate of tax - 45% - is applied to the portion of income above £125,140.

Any freeze of personal tax thresholds may sound appealing when compared to the lowering of income thresholds but future wage growth and rental income could tip many landlords into a higher tax band. 

Some landlords have already switched to buying investment properties through a limited company for the tax advantages. That’s because when a property is bought through a limited company, rental profits are subject corporation tax, not income tax. 

Here’s where it can be more financially astute. The current rate of corporation tax, year starting 1st April 2025, is 19% for small profits rate (companies with profits under £50,000) and 25% for main rate (companies with profits over £250,000). So, if you are a higher- or additional-rate taxpayer, you could make tax savings.

All eyes are now on the Chancellor as she looks to make up an estimated £22bn shortfall in the Government's finances. Despite breaking its own manifesto pledges, increasing taxes looks set to be a Budget certainty. We are following with interest to see which taxes could be changed, and will advise landlords on how best to buy, sell and hold property investments moving forwards. If you have any questions, please get in touch.