Selling Your Home to a Limited Company – Will You Still Pay the 3% Stamp Duty Surcharge?

At Mortgage321, we’re often asked whether moving a property into a limited company can help reduce Stamp Duty Land Tax (SDLT) on future purchases. It’s a smart question, especially as more landlords and investors use limited company structures for tax efficiency and portfolio growth.

But when it comes to your main residence, the rules can be surprising.

The 3% Additional Stamp Duty Levy – A Quick Refresher

In April 2016, the government introduced a 3% SDLT surcharge on most purchases of additional residential properties in England and Northern Ireland. This applies to second homes, buy-to-lets, and investment properties.

The key exemption is when you sell your main home and replace it with another main home. In this case, you usually won’t pay the extra 3% (or you may reclaim it if you paid it at completion).

What If You Sell Your Home to Your Limited Company?

Some homeowners consider selling their current residence to their own limited company before purchasing a new home. At first glance, it seems logical:

• You’re selling your main residence.
  
• You’re buying a new one to live in.
  
• Surely this should count as a “replacement of main residence” and avoid the surcharge?
  

Unfortunately, HMRC takes a different view.

Because the sale is to a company you control, it’s treated as a “connected party transaction.” For SDLT purposes, this does not count as a true disposal of your main residence.

👉 This means that when you buy your new home, HMRC will still view you as owning more than one property – and the 3% surcharge will still apply.

Double SDLT to Consider

There’s also another catch:

• Your company will have to pay SDLT (including the 3% surcharge) when it buys your old home.
  
• You will then personally face SDLT (again with the 3% surcharge) when you purchase your new residence.
  

That’s a double SDLT hit, which can make this route very costly.

When Moving Property to a Company Makes Sense

Transferring property to a limited company is often used for:

• Buy-to-let portfolios where rental income is being reinvested.
  
• Tax planning, especially for higher-rate taxpayers.
  
• Portfolio growth, where lenders may offer more flexible terms to companies.
  

But as a tool for avoiding the 3% SDLT levy on your own home? Unfortunately, it doesn’t work.

Smarter Alternatives

If your goal is to move home without triggering the additional levy, the straightforward route is to sell your main residence on the open market and buy your next one personally.

For landlords looking at restructuring, there may be other tax-efficient strategies – but these need careful planning around:

• Capital Gains Tax (CGT)
  
• SDLT implications
  
• Mortgage refinancing in the company name
  

At Mortgage321, we regularly help clients weigh up these options and structure finance in a way that avoids costly mistakes.

Final Word

Selling your home to your limited company does not exempt you from the 3% SDLT surcharge on your next purchase. In fact, it could result in paying the surcharge twice.

If you’re considering moving properties into a limited company or planning your next property purchase, it’s essential to get the right advice before you act.

✅ Thinking about restructuring or buying your next property?
At Mortgage321, we specialise in complex mortgage scenarios, including limited company lending, portfolio refinancing, and specialist buy-to-let strategies.

📞 Call us today on 0800 612 8292 or email [email protected] to arrange a no-obligation consultation. Let’s make sure your next move is structured in the most cost-effective way possible.

💡 At Mortgage321, we specialise in complex property finance – from buy-to-let portfolios to limited company structures and beyond. Get in touch today to explore your options with confidence.