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The HMO Mortgage Broker
Limited Company HMO Mortgages

Limited Company HMO Tax Calculator

Compare the annual tax on one HMO owned personally or through a limited company.

This calculator illustrates the annual tax on one HMO's profit if you own it personally or through a limited company, using the rates for the tax year you choose. It is an illustration, not tax advice, and it does not recommend a structure.

Your figures

Annual figures for one HMO.

Bills, repairs, letting fees and insurance. Exclude mortgage interest.

Salary or pension, before tax

Share of the company's after-tax profit paid out to you

Tax year

Your results

Difference in annual tax
£1,897
Lower tax in this illustration: Limited company. Personal £15,146 · company £13,249
MeasurePersonalCompany
Taxable profit£48,000£28,000
Tax on profit (income tax / corporation tax)£15,146£5,320
Section 24 credit (included above)£4,000–
Dividend tax–£7,929
Total tax£15,146£13,249
Net income kept£12,854£14,751
Left in company–£0

Illustration only, not tax advice. Uses income tax rates for England, Wales and Northern Ireland. Your position depends on your full circumstances; speak to a qualified tax adviser before choosing how to own property.

Not modelled: mortgage rate differences for companies, stamp duty and capital gains tax on transferring a property into a company, accountancy costs, Scottish income tax rates, and tax on profit left in the company when it is taken out later.

Illustrative figures only, based on the numbers you enter. Not a mortgage offer.

How we calculate Limited Company Tax

Methodology and data sources, updated October 2026

Formulas

Personal: taxable property profit
Annual rent - Running costs

Mortgage interest is not deducted from a landlord's property profit (Section 24). A tax credit is given instead.

Personal: income tax on the property
Income tax on (Other income + Property profit) - Credit - Income tax on Other income alone

The property profit is taxed on top of your other income at the property income rates for the tax year, after the personal allowance (reduced by £1 for every £2 of income over £100,000).

Personal: Section 24 credit
Credit = Basic rate × lower of (Mortgage interest, Property profit, Income above the personal allowance)

The credit rate is 20% for 2026/27 and 22% for 2027/28.

Company: taxable profit and corporation tax
Profit = Annual rent - Running costs - Mortgage interest; Corporation tax on Profit

A company deducts mortgage interest in full. Corporation tax is 19% on profit up to £50,000 and 25% from £250,000, with marginal relief in between.

Company: dividends and dividend tax
Dividends = (Profit - Corporation tax) × Share taken as dividends; Dividend tax = Income tax on (Other income + Dividends) - Income tax on Other income alone

Dividends are taxed on top of your other income at the dividend rates, after the £500 dividend allowance.

Total tax and net income kept
Personal: Total tax = Income tax on the property; Net kept = Rent - Running costs - Interest - Total tax. Company: Total tax = Corporation tax + Dividend tax; Net kept = Dividends - Dividend tax; Left in company = Profit - Corporation tax - Dividends

The headline is the difference between the two total tax figures.

Data sources

  • Yes:GOV.UK: Changes to tax rates for property, savings and dividend income (November 2025 Budget)
  • Yes:GOV.UK: Income Tax rates and Personal Allowances
  • Yes:GOV.UK: Corporation Tax rates and marginal relief

Key assumptions

PropertyAll figures are annual and for the tax year you choose.
One HMO
Default figuresRent, costs, interest and other income are example figures. Replace them with your own.
Illustrative only
Ownership
One owner or one shareholder
Tax ratesScottish income tax rates are not modelled.
England, Wales and Northern Ireland
Types of incomeOther income is treated as employment or pension income. Savings income is not included.
Other income, property profit and dividends only
Not includedNo pension contributions, Gift Aid, student loans or National Insurance.
Reliefs and deductions
Section 24 carry forwardFinance cost relief that cannot be used in the year is not carried forward. Losses are not carried forward either.
Not modelled
Associated companiesCorporation tax uses the small profits rate, main rate and marginal relief limits for a single company.
None
Profit left in the companyRetained profit is shown separately. Tax when it is paid out in a later year is not modelled.
Not taxed again here
Costs of each structureMortgage rate differences for companies, stamp duty and capital gains tax on transferring a property into a company, and accountancy costs.
Not modelled