Stamp Duty for Limited Companies vs Individuals

Company vs Personal Purchase: How Stamp Duty Differs for Limited Companies

If you’re planning to invest in property, one of the biggest financial decisions you’ll face is whether to buy as an individual or through a limited company. The tax implications - especially Stamp Duty Land Tax (SDLT) - can vary significantly depending on the route you choose.

In this article, we break down the key differences in stamp duty for limited companies vs individuals, including rates, surcharges, exemptions, and common pitfalls to watch out for.

What Is Stamp Duty Land Tax (SDLT)?

Stamp Duty Land Tax (SDLT) is a tax paid when purchasing property or land in England and Northern Ireland. The amount depends on the property price, type (residential or commercial), and the buyer’s circumstances (e.g. first-time buyer, second home, or company purchase).

Personal Property Purchases: How SDLT Works

When you buy a property in your own name:

Standard SDLT rates apply for residential property.
You may benefit from first-time buyer relief (for homes under £500,000).
If it's a second home, you’ll typically pay a surcharge on top of the standard rates.

Standard Residential SDLT Rates (2025):

0% on the first £125,000
2% on £125,001–£250,000
5% on £250,001–£925,000
10% on £925,001–£1.5 million
12% above £1.5 million

If it's a second home, these rates are increased by 3% at each band.

Example: Buying a second home for £300,000 in your name means paying:

5% on the first £125k = £6,250
7% on the next £125k = £8,750
10% on the remaining £50k = £5,000
Total SDLT = £20,000

Limited Company Property Purchases: What’s Different?

When you buy through a limited company, SDLT works differently.

Key differences include:

No First-Time Buyer Relief
Companies aren’t eligible for first-time buyer discounts.

Mandatory Surcharge Rates
All residential purchases by a limited company attract the higher rates that apply to second homes—regardless of how many properties the company owns.

No Personal Allowances
Limited companies don’t benefit from personal tax bands or exemptions.

15% Flat Rate SDLT (in some cases)
For purchases over £500,000 where the property is not rented and is intended for personal use (e.g. by directors), a 15% flat rate may apply. However, this usually doesn’t apply to buy-to-let companies.

Commercial SDLT Rates for Mixed-Use
Buying a mixed-use property (residential + commercial) as a company allows you to access lower commercial SDLT rates—a common way to reduce liability.

Buy-to-Let Company Stamp Duty Example

Let’s say your limited company buys a buy-to-let property for £400,000:

5% on the first £125k = £6,250
7% on the next £125k = £8,750
10% on the remaining £150k = £15,000
Total SDLT: £30,000

Compare that to an individual’s purchase of the same second home - they’d pay the same SDLT, but might benefit from main residence exemptions, or have future CGT planning options.

Common Pitfalls with Ltd Company SDLT

Overlooking the 15% Rate
If your company purchases property for directors' personal use, the 15% rate may kick in.

Stamp Duty Overpayment
Many companies overpay SDLT by applying residential rates unnecessarily - especially on mixed-use properties.

Can You Reclaim SDLT If You Overpaid?

Yes. If your limited company has overpaid stamp duty, there may be grounds to claim a refund, particularly in cases involving:

Mixed-use properties incorrectly classified as residential
Second homes where main residence exemptions could apply retroactively

At SCA Tax, we specialise in reviewing SDLT calculations and identifying refund opportunities for individuals and limited companies alike.

Conclusion

Buying through a limited company can offer long-term tax advantages, especially for landlords and investors - but SDLT is where many companies lose money unnecessarily.

Whether you're planning your first buy-to-let or reviewing a past purchase, understanding the nuances of Ltd company SDLT is critical. A careful review can mean thousands saved - or reclaimed.