Landlords are increasingly setting up buy-to-let companies to benefit from more favorable tax treatment, according to research by Hamptons. The move allows investors to make their rental property businesses more profitable by avoiding Capital Gains Tax (CGT) on property sales, which has become a hot topic amid speculation that Chancellor Rachel Reeves may increase CGT in the upcoming Budget.

In 2024, 70% of new buy-to-let purchases in England & Wales were made using a limited company structure, with the remaining 30% bought in personal names. Last month alone, 5,312 new limited companies were established to hold buy-to-let properties across Great Britain, with projections suggesting between 60,000 and 62,000 companies will be created by the end of the year, surpassing 2023’s total of 50,004.

Most of these companies are being set up in the South of England, and Hamptons’ Head of Research, Aneisha Beveridge, noted that many landlords are transferring properties they own personally into company structures to shelter from rising taxes. This trend is also driven by the impact of rising mortgage rates, making limited companies an increasingly attractive option for landlords looking to protect profitability amid a challenging tax environment.