Do I Need an Accountant When Buying My First Investment Property

Are you legally required to have an accountant

No, there is no legal requirement to use an accountant when purchasing or managing an investment property. You can complete the purchase, file your own tax returns, and handle your accounts yourself if you wish.

However, property investment involves multiple layers of taxation, including income tax, Capital Gains Tax, and possibly Stamp Duty Land Tax. A good accountant can help you navigate these areas correctly and avoid costly mistakes that often arise when landlords go it alone.

How an accountant can help before you buy

An accountant’s role begins long before the purchase is complete. The structure of your investment and how you finance it can have long-term tax implications.

Choosing the right ownership structure

One of the first decisions new landlords face is whether to buy the property in their own name or through a limited company. Each option has different tax consequences.

Personal ownership: Profits are taxed as personal income, and mortgage interest relief is restricted.

Limited company ownership: Profits are subject to Corporation Tax, and mortgage interest remains fully deductible, but administrative costs are higher.

An accountant can calculate which option suits your goals, income level, and future portfolio plans. Choosing the wrong structure early on can result in unnecessary tax bills or expensive restructuring later.

Calculating affordability and returns

Before you commit to buying, an accountant can help you forecast your net rental yield by factoring in:

Purchase price and deposit

Mortgage interest and fees

Expected rental income

Running costs, maintenance, and letting agent fees

Annual tax liabilities

This helps you understand the real profitability of the property after all expenses and taxes are accounted for.

Understanding Stamp Duty Land Tax

When you buy an investment property in the UK, you must pay Stamp Duty Land Tax (SDLT) on completion. An accountant can explain the current rates, including the 3% surcharge that applies to second homes and investment properties.

Knowing the SDLT cost upfront helps you plan your cash flow and prevents surprises during completion.

How an accountant helps after purchase

Once your property is rented out, you will need to declare rental income to HMRC and keep accurate financial records. This is where an accountant’s ongoing support becomes valuable.

Managing your rental accounts

An accountant can set up a simple system for recording rental income and expenses. They can ensure that you claim all allowable deductions such as:

Letting agent fees

Property maintenance and repairs

Insurance premiums

Legal and accounting fees

Mortgage interest (if applicable through a company)

These deductions can significantly reduce your taxable profit and overall tax bill.

Preparing and filing your Self Assessment

If you own the property personally, you must file a Self Assessment tax return each year to declare rental income. An accountant will ensure that your return is completed correctly and submitted on time, avoiding penalties and interest.

They can also calculate how much tax you owe in advance, so you can budget for it rather than face unexpected bills.

Advising on mortgage and financing options

As your property investment grows, an accountant can advise on refinancing, additional purchases, and ways to optimise your borrowing. They can help you understand how interest rate changes or new properties will affect your overall tax position.

Planning for future taxes

Capital Gains Tax (CGT)

When you eventually sell your property, any increase in value may be subject to Capital Gains Tax. An accountant can help you plan for this by tracking the property’s cost base and identifying reliefs such as:

Private Residence Relief (if the property was once your home)

Letting Relief (in certain cases)

Capital improvements (costs that increase the property’s value)

By preparing early, you can reduce or defer CGT liabilities and keep more of your profits.

Inheritance Tax (IHT)

If your property portfolio forms part of your estate, it could be subject to Inheritance Tax when passed on to your heirs. An accountant can work with a financial planner to structure ownership in a way that minimises future IHT exposure, for example through trusts or company shares.

The benefits of using an accountant for property investment

While hiring an accountant is an additional cost, the benefits often outweigh the expense.

Tax efficiency: Professional advice ensures you pay the right amount of tax and take advantage of available reliefs.

Accuracy: Accountants help you avoid errors in calculations and filings that could trigger HMRC investigations.

Time saving: They handle record keeping, returns, and communication with HMRC, freeing up your time to focus on managing your property.

Strategic planning: They can advise on how to grow your portfolio tax-efficiently and manage multiple properties under one structure.

Many landlords find that the tax savings and financial clarity provided by an accountant easily cover their fees.

When an accountant may not be necessary

If you own a single property, manage it yourself, and your finances are straightforward, you might not need an accountant immediately. HMRC’s online Self Assessment system allows you to report rental income manually.

However, as your portfolio grows or your tax situation becomes more complex, professional guidance becomes increasingly valuable. Even a one-off consultation before your first purchase can prevent expensive mistakes later.

How to choose the right accountant

When looking for an accountant, choose one who:

Specialises in property investment and landlord tax

Understands buy-to-let mortgages and property company structures

Is registered with a recognised body such as ACCA, ICAEW, or AAT

Communicates clearly and offers proactive advice, not just compliance services

It is often worth meeting two or three firms before choosing one that fits your needs and investment goals.

Final thoughts

You do not need an accountant to buy your first investment property, but having one can make a substantial difference in your financial outcomes. From choosing the right ownership structure to managing taxes efficiently, professional advice helps you build a solid foundation for long-term success.

An accountant can also ensure compliance with HMRC rules, maximise deductions, and guide your strategy as you expand your portfolio. For most new landlords, the right accountant is not just a cost but a valuable partner in building wealth through property investment.