Buying property through a limited company

SPV stands for special purpose vehicle. In buy-to-let, it means a limited company set up only to buy, hold and let property, with no other trading activity. Lenders prefer SPVs because the company's finances are simple to assess. Tax-wise it's an ordinary company: it pays corporation tax on rental profits and gains, and you're taxed again when you take money out as dividends or salary.

From 1 April 2026, 19% on profits up to £50,000 and 25% on profits above £250,000, with marginal relief giving an effective rate between those figures. The limits are shared between associated companies, so owning several companies can push each into the higher rate sooner. Rental profits are calculated with mortgage interest deducted in full, and gains on selling property are also charged to corporation tax.

Form the company at Companies House before you exchange contracts, with a property-letting business activity, the directors and shareholders you've planned for, and its own bank account. Lenders usually want a company that only holds property. Decide the shareholdings first, because changing them later can have tax consequences, and think about lending your deposit rather than paying it in as share capital. Remember that companies pay the SDLT higher rates on every residential purchase.

Often a little, though the gap has narrowed as more lenders offer limited company buy-to-let. Interest rates and fees can be higher, the choice of lenders is smaller, and nearly all lenders ask directors and main shareholders to give personal guarantees. Lenders also look at rental cover differently for companies. Your mortgage broker can compare products, and we'll make sure the structure they finance works for tax.

Not usually. A close company that exists mainly to make investments is a close investment-holding company, which pays the 25% main rate on all its profits. A company letting land commercially escapes that, but letting to people connected with the company, including their spouses and relatives, doesn't count as commercial. Letting a company-owned property to family can also bring ATED and income tax issues for the occupier.

Many landlords simply hold the shares personally, which keeps things simple. A holding company can help when you have several property companies or a trading business, for example to move money between companies or keep risk separate. It adds cost and the companies become associated, sharing the corporation tax limits. Our sister site [holding-company.co.uk](https://holding-company.co.uk) explains the wider structuring.

It can make sense. Spreading shares across family members can use their personal allowances and lower tax bands on dividends, and can move future growth out of your estate for inheritance tax. There are rules to watch: income from shares a parent gives to their own minor child is generally taxed on the parent, and HMRC can challenge arrangements that simply divert income. Different share classes, as used in Family Investment Companies, give more flexibility.

Yes, and it's common. Most landlords subscribe for a small number of shares and lend the rest of the deposit to the company through a director's loan account. The company can repay that loan to you tax-free later when it has the cash. You can also charge the company interest, which it deducts, though you're taxed on the interest as savings income.

Companies don't pay capital gains tax. Their gains are included in profits and charged to corporation tax at 19% to 25%. There's no annual exempt amount for companies. Unlike individuals, a company doesn't currently need to make a separate 60-day return on a UK residential sale if it's UK resident. To get the proceeds to you personally, there's a second layer of tax when you take them out.

Less often. Much of the case for a company comes from full mortgage interest relief, which doesn't matter if there's no debt. For a cash buyer, the comparison is corporation tax plus tax on extraction against personal tax at your marginal rate. If you'd reinvest profits for years, the company can still win. If you need the income now, owning personally is often simpler and cheaper.

You can, but it's usually expensive. The company is treated as selling at market value, so it pays corporation tax on any gain. You're then treated as receiving value from the company, typically a dividend or distribution, unless you pay full price. SDLT can be due on what you pay or any mortgage you take over, including the surcharge if you own other homes. It's far better to choose the right owner at the start.

No. One company can own a whole portfolio, and that's usually simplest. Some landlords set up more than one, for example to keep a development project separate from long-term lets, to suit a lender, or for different family members. Each company adds accounts and filings, and companies under common control share the corporation tax thresholds, so more companies doesn't mean more lower-rate profit.

A company must keep accounting records, file annual accounts and a confirmation statement at Companies House, and file a corporation tax return with HMRC. It also needs a register of shareholders and directors and of people with significant control. If it owns a dwelling over £500,000, it files ATED returns. Keeping company money separate from your own, and documenting loans with the company, avoids most problems.

Often when you're a basic-rate taxpayer who needs most of the rental profit to live on, when you have little or no borrowing, or when you plan to sell within a few years. The double layer of tax on extraction, extra running costs and company mortgage terms can outweigh the saving. A company tends to suit higher-rate landlords building a long-term portfolio and reinvesting profits.

You can, and some buyers prefer it. You'd pay capital gains tax on the gain on your shares, at 18% or 24%, rather than the company paying corporation tax on each property and you paying tax again to extract the cash. The buyer pays 0.5% stamp duty on the shares instead of SDLT on the properties. Buyers usually ask for a discount for the gains built up inside the company, and want thorough due diligence.

From 6 April 2027, individuals pay separate property income rates of 22%, 42% and 47% on rental profits in England, Wales and Northern Ireland. Companies are unaffected and continue to pay corporation tax. So the gap between personal and company ownership widens slightly for profits that stay in the company. Dividend rates haven't changed for 2027, so the overall comparison still depends on how much you take out.