Do Limited Companies Pay Stamp Duty

Find out if limited companies pay Stamp Duty on property and how much SDLT applies to company property purchases in the UK

If you are buying property through a limited company, you might be wondering whether stamp duty applies and how the rules differ from buying in your own name. The short answer is yes, limited companies do pay Stamp Duty Land Tax (SDLT) on property purchases in England and Northern Ireland, and in most cases they pay more than individual buyers.

This article explains how SDLT works for limited companies, the different rates that apply, and what you should consider if you are investing in property through a company.

What is Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax is a tax you must pay when you buy property or land in England or Northern Ireland above a certain value. The amount of tax you pay depends on the purchase price, the type of buyer you are and whether the property is residential or non-residential.

Scotland and Wales have their own versions of stamp duty:

  • Scotland charges Land and Buildings Transaction Tax (LBTT)

  • Wales charges Land Transaction Tax (LTT)

This article focuses on SDLT rules for properties bought in England and Northern Ireland.

Do limited companies have to pay stamp duty?

Yes. A limited company must pay SDLT on property purchases just like an individual would. In fact, the rules are stricter for companies, especially when it comes to residential properties.

If a company buys a residential property worth more than £40,000, it will usually pay:

  • The standard SDLT rate

  • An additional 3% surcharge for second homes and investment properties

  • A flat 15% rate if the property is worth over £500,000 and is not used for commercial letting

Stamp Duty rates for limited companies in 2025

For residential properties, limited companies generally pay:

  • 3% on the first £250,000

  • 8% on the portion between £250,001 and £925,000

  • 13% on the portion between £925,001 and £1.5 million

  • 15% on anything above £1.5 million

These rates already include the 3% additional property surcharge.

Example
A limited company buys a residential property for £600,000. The SDLT would be:

  • 3% on the first £250,000 = £7,500

  • 8% on the next £350,000 = £28,000

  • Total SDLT: £35,500

If the company is buying a non-residential or mixed-use property (such as a shop with a flat above), it pays lower commercial SDLT rates:

  • 0% on the first £150,000

  • 2% on the portion between £150,001 and £250,000

  • 5% on anything above £250,000

What is the 15% flat rate?

If a company buys a residential property for over £500,000 and does not let it out commercially or use it for a qualifying trade, the 15% flat SDLT rate applies. This rule was introduced to discourage companies from buying homes for directors or shareholders to live in.

You may be exempt from the 15% rate if the property is:

  • Let to tenants on a commercial basis

  • Used for a property rental or property development business

  • Used for employee accommodation

  • Part of a genuine trading activity

To claim exemption, you must inform HMRC at the time of filing the SDLT return.

Why do people buy property through a limited company?

Despite higher stamp duty rates, buying property through a company can have other tax benefits, such as:

  • Paying corporation tax on profits instead of income tax

  • Retaining profits within the company for reinvestment

  • More efficient inheritance planning

  • No restriction on mortgage interest relief

However, the upfront costs are often higher due to SDLT, legal fees and potential mortgage interest rate increases.

Can stamp duty be claimed back by a company?

In most cases, no. SDLT is not a deductible expense for corporation tax purposes. It is considered a capital cost and may be factored into the base cost for capital gains tax when the property is sold. You cannot reclaim SDLT through VAT either, as residential properties are VAT exempt.

What about transferring property to a company?

If you own property personally and decide to transfer it to a limited company, this will still trigger SDLT based on the market value of the property at the time of transfer, even if no money changes hands.

This is especially important for landlords moving properties into a company structure. The transfer may also trigger capital gains tax for the individual, so it is essential to take tax advice before doing this.

Final thoughts

Limited companies do pay stamp duty when buying property, and in many cases they pay more than individuals. The 3% surcharge and the potential 15% flat rate make residential purchases through a company more expensive upfront. However, many investors still find company ownership attractive due to the long-term tax advantages.

Before buying through a company, weigh up the pros and cons carefully and speak to a tax adviser to make sure the structure fits your financial goals. Understanding the SDLT rules can help you avoid unexpected costs and plan your investment strategy more effectively.