Research from Coventry for Intermediaries showed almost half of landlords believed at least one tax or cost-related myth, and 21% believed the misconception that only large-scale landlords can benefit from incorporation.
A third said understanding legal and tax implications was the biggest challenge when incorporating.
Approximately 23% believed that limited company BTL mortgages offered fewer tax benefits, despite landlords using this instrument being potentially eligible for lower corporation tax rates compared to personal income tax.
Another 22% said they believed property transfers to a limited company were too costly. Costs such as stamp duty and legal fees may apply, but the actual expense depends on the “specific scenario”, the lender said.
Nearly a quarter added that they thought limited company BTL mortgages were more expensive than a typical BTL mortgage, and a similar proportion believed incorporation could impose excess administration burdens.
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Jonathan Stinton, head of intermediary relationships at Coventry for Intermediaries, said: “Interest in limited company BTL is growing, and more landlords are exploring incorporation as a way to structure their portfolios more efficiently and future-proof their investments. But our research indicates that many may be doing so based on false assumptions or outdated information.
“There are real benefits to incorporating, from accessing lower rates of corporation tax and retaining profits within the business, to making it easier to plan for succession or add shareholders in the future. For landlords looking to scale, a limited company structure can offer more control, flexibility, and long-term value.
“This is where brokers can make a real impact. By helping clients understand the full picture, brokers can become long-term strategic partners. That kind of clarity builds confidence, simplifies complex decisions, and creates stronger relationships that last well beyond a single transaction.”
Coventry Building Society entered the limited company BTL space earlier this year.
