Record Buy-to-Let Companies Formed in England. Why It Matters for the Diaspora.

Kingston, Jamaica, 1 September 2025

A record 66,587 buy-to-let limited companies were incorporated in England in 2025, an eight percent increase on the previous year and the highest annual total ever recorded. The surge reflects a fundamental shift in how property investment is being structured in England, driven by tax changes that have made personal ownership of rental property increasingly costly for higher-earning landlords. The trend is reshaping who owns England’s rental housing and how it is managed, with implications that extend to the diaspora investors who operate between English and Jamaican markets.

Why Landlords Are Incorporating

The root cause is Section 24, the tax change that came into full effect from 2020/21, which removed the ability of individual landlords to deduct mortgage interest as an expense from rental income. Under the old system, a landlord paying £10,000 a year in mortgage interest could deduct that entire amount from their rental income before calculating tax. Under Section 24, they receive only a 20 percent tax credit, regardless of whether they pay income tax at the basic rate, higher rate, or additional rate. For a higher-rate taxpayer, this change turned what was a 40 percent effective deduction into a 20 percent credit, dramatically increasing the tax burden on leveraged property investments.

Limited companies are not subject to Section 24. They can deduct mortgage interest in full before calculating taxable profits, and they pay corporation tax rather than income tax. The corporation tax rate for companies with annual profits below £50,000 stands at 19 percent, rising to 25 percent for profits above £250,000. For a higher-rate taxpayer earning significant rental income personally, the difference between paying 40 percent income tax with restricted interest relief and 19 percent corporation tax with full interest deductibility can be tens of thousands of pounds per year across a portfolio of properties.

The 2027 Tax Change Driving Urgency

The incorporation surge in 2025 was intensified by the announcement that personal property income tax rates will rise further from April 2027, with rental profits taxed at rates of 22, 42, and 47 percent across the basic, higher, and additional rate bands. The change increased the attractiveness of corporate ownership still further, and prompted many landlords with mixed portfolios to review their structures urgently. A record half of new buy-to-let company shareholders in 2025 were from the millennial generation, according to analysis of Companies House data, suggesting that younger investors are entering the market with corporate structures from the outset rather than converting later.

Chartered accountants have sounded a note of caution about the rush to incorporate. While the tax efficiency of limited company ownership is genuine for many landlords, incorporation is not without costs. Moving existing personally held properties into a company can trigger both stamp duty and capital gains tax, potentially creating a substantial upfront cost that takes years to recover through ongoing tax savings. Company mortgages carry slightly higher interest rates than personal mortgages. And running a company adds ongoing accounting and compliance costs. Professional advice before incorporation is not optional; it is essential.

What This Means for Jamaican Investors

Many Jamaicans in the diaspora who invest in English property hold their assets personally. The structural shift underway in England, toward corporate ownership of rental property, has direct relevance for diaspora investors reviewing their portfolios. The tax efficiency argument for limited companies strengthens as rental incomes grow, mortgage interest costs remain significant, and personal tax rates rise. For diaspora investors already holding multiple English properties, the decision about whether to restructure into corporate ownership is increasingly important.

The broader lesson for Jamaica’s property investment ecosystem is that the structure of ownership matters as much as the asset itself. Jamaica has its own company law and tax framework for property holding, but the sector lacks the kind of detailed, publicly available guidance that helps English investors make informed structural decisions. As Jamaica’s property market professionalises and investment portfolios grow in scale and complexity, the conversation about optimal ownership structures, and the tax implications of each, will become more relevant domestically as well as for diaspora investors managing cross-border portfolios.