Can I Sell My House to My Limited Company?
If you’re a homeowner looking to restructure your finances, release equity, or simply build a property portfolio, you may have considered whether you can sell your house to a limited company you own.
This is a common consideration among many UK landlords, small business owners, and anyone exploring property investment who is looking to sell a house to a limited company as part of their long-term plans.
The process of selling your home to your limited company is tightly regulated and comes with important tax implications that every homeowner should be aware of before making a decision.
We explain what it means to sell your house to your limited company, tax considerations, and how selling your house for cash might offer a faster and simpler alternative.
What does it mean to sell a house to a limited company?
Essentially, selling your home to your limited company involves transferring legal ownership from you as an individual to a separate legal entity (your business). Even though you may be the company director or sole shareholder, the company is not actually “you” in the eyes of the law. That means the sale must be treated the same way it would if you were selling to any other buyer.
This is what HMRC refers to as a connected party transaction, and these transfers are subject to strict valuation rules to prevent tax avoidance. So, even if you decide to sell the property for a reduced price, or even gift it to the company, HMRC will still base any tax calculations on the property’sfull market value. This means that a proper RICS valuation is essential when transferring property between yourself and your company.
What are the benefits of selling your house to your limited company?
Selling a house to a limited company you own can offer advantages particularly for landlords and property investors, however, these benefits are often long-term and strategic, rather than practical for homeowners who want to sell their house fast.
1. Tax on rental income
Where a property is used as a rental investment, holding it within a limited company can be more tax-efficient for some landlords, but this applies to investment properties only. Rental profits are taxed under corporation tax rules rather than personal income tax, and mortgage interest can still be treated as a deductible business expense.
This structure is most relevant to higher-rate taxpayers with buy-to-let properties. It does not usually benefit homeowners selling their main residence.
2. Retaining profits within a company structure
A limited company allows profits to be retained rather than withdrawn immediately. This can be beneficial for investors who want to reinvest rental income into additional properties, fund refurbishments or improvements, or grow a portfolio without triggering personal tax on every year’s profits. Tax is generally only paid personally when funds are extracted from the company.
3. Property portfolio
Some landlords choose to sell properties into a limited company to bring all assets under a single corporate structure. This can help maintain consistent property ownership and management and long-term planning for refinancing or future sales. It can also help to separate personal and investment assets
Understanding the tax implications
While selling a house to a limited company can work in specific investment situations, it also comes with significant drawbacks that many homeowners underestimate. The biggest factor to consider when selling your home to your limited company is tax. Even though you control both sides of the transaction, HMRC classifies it exactly like a sale to a third party. This means that any taxes ordinarily due on a sale will still apply.
The first is Capital Gains Tax (CGT). If the property is your main residence, you may not owe any CGT due to Private Residence Relief. However, if it is a rental property or second home, you may have a CGT bill based on the market value at the time of sale, even if you sell it to your company for a lower price. Higher-rate taxpayers may pay CGT at a rate of 24%.
The company itself will also need to pay Stamp Duty Land Tax (SDLT). This applies even if you personally own the company and even if no money changes hands. Companies buying residential property must pay the standard rate of SDLT as well as the additional 3% surcharge that applies to second homes and investment properties. For higher-value homes, this can become a substantial expense.
On top of this, once the property sits within the company, any rental profits will be taxed under corporation tax rules. If you later withdraw money from the company, such as the proceeds of the sale, you may then face dividend tax or income tax depending on how you extract the cash.
What happens if you have a mortgage?
If your property is mortgaged, the process becomes more complicated. Most residential mortgage lenders will not allow a transfer to a limited company without completely refinancing. This means you would almost certainly need to switch to a limited company buy-to-let mortgage, which typically comes with higher interest rates, larger deposits, and stricter affordability checks. The company also needs to demonstrate that it is capable of servicing the debt.
If your property is owned outright with no mortgage, the transfer is much simpler, though the SDLT and CGT rules still apply in full.
Sell your home for cash with confidence
For homeowners who want a fast sale with immediate access to funds and no tax or refinancing surprises, a cash house buyer is often the most straightforward route. A cash house buyer can be a practical solution for many house sellers, especially when speed is a priority. We understand that life changes can complicate even the simplest property sale, and our role is to remove the complexity and handle the sale quickly, smoothly, and with minimal stress.
See what a fast, cash sale could look like for your property, get your no-obligation free cash offer today.
