How to Buy a House Through a Limited Company

Learn how to buy a property through a UK limited company, including tax rules, mortgage steps and pros and cons

Buying property through a limited company is becoming increasingly popular in the UK, particularly among landlords and investors. Whether you are looking to grow a portfolio or buy a rental property for the first time, using a company structure can offer tax advantages and more flexible long-term planning.

But the process is different from buying in your own name. This guide explains how to buy a house through a limited company, including the steps involved, tax implications, pros and cons, and what to watch out for.

Can a limited company buy a house?

Yes. A UK limited company can legally buy and own residential or commercial property. Many property investors now set up a special purpose vehicle (SPV) limited company for this purpose. An SPV is simply a company set up solely to hold property and manage lettings.

There is no legal barrier to a company owning residential property, but mortgage lenders, tax rules and compliance requirements are different compared to personal ownership.

Who usually buys through a limited company?

  • Landlords growing a buy-to-let portfolio

  • Investors planning to hold property long-term

  • Higher-rate taxpayers seeking to reduce personal tax liability

  • Property developers and letting businesses

If you are buying a home to live in, purchasing through a company is rarely beneficial and may attract extra tax.

Steps to buy a house through a limited company

  1. Set up a limited company
    You can register a company online through GOV.UK or use a formation agent. If your goal is to hold property, choose a name that reflects this and use SIC code 68209 (letting and operating of own or leased real estate).

  2. Open a business bank account
    You will need a separate account in the company name to pay for deposits, mortgage payments and property-related costs.

  3. Secure a buy-to-let mortgage
    Not all lenders offer mortgages to limited companies. You will need to find a specialist lender or broker. Expect stricter criteria, higher interest rates and larger deposit requirements (often 25 percent or more).

  4. Make an offer and instruct a solicitor
    Once your offer is accepted, you will need a solicitor experienced in limited company purchases. The legal process is similar to buying personally but includes extra checks related to the company’s structure and directors.

  5. Pay stamp duty and complete the purchase
    Stamp Duty Land Tax (SDLT) applies to all limited company purchases and is usually higher than for individual buyers. You must also file a land transaction return and register the property in the company’s name.

  6. Register for tax and accounting obligations
    Your company must register for Corporation Tax, keep financial records and file annual accounts. If rental income exceeds £90,000 per year, you will also need to register for VAT, although residential rent is usually exempt.

Tax advantages of buying through a limited company

  • Corporation Tax: Profits from rental income are taxed at the corporation tax rate, currently 25 percent for companies with profits over £50,000. This may be lower than personal income tax rates, particularly for higher-rate taxpayers.

  • Mortgage interest relief: Unlike individuals, companies can fully deduct mortgage interest as a business expense.

  • Retaining profits: Companies can retain profits to reinvest, rather than withdrawing them all in one go.

  • Inheritance planning: Shares in a company can be passed on more easily or structured using trusts.

Downsides and risks

  • Higher stamp duty: Limited companies pay the 3 percent additional property surcharge on all residential purchases over £40,000.

  • No capital gains tax allowance: Companies do not get the £3,000 annual capital gains exemption that individuals receive.

  • Higher mortgage costs: Limited company mortgages often come with higher interest rates and fees.

  • Double taxation: You pay Corporation Tax on profits, and personal tax when withdrawing money as salary or dividends.

  • More admin: You must file annual accounts, Corporation Tax returns and confirmation statements.

What properties can a company buy?

A limited company can buy:

  • Residential buy-to-let houses and flats

  • HMOs (houses in multiple occupation)

  • Commercial buildings or mixed-use property

  • Development projects or off-plan properties

However, lenders may have restrictions, and some require the company to be set up solely for property investment.

Real-world example

James and Claire are higher-rate taxpayers looking to build a property portfolio. Instead of buying their second buy-to-let in their own names, they set up a limited company. They pay a 25 percent deposit and get a limited company mortgage at 5.5 percent interest. While stamp duty is higher, they benefit from full mortgage interest relief and lower tax on retained profits.

Should I transfer an existing property to a company?

If you already own a rental property personally, transferring it to a company is usually treated as a sale. You may face:

  • Capital Gains Tax on any increase in value since you bought the property

  • Stamp Duty on the current market value, even if no money changes hands

  • Legal and mortgage costs, as most lenders will not allow a simple transfer

This can make transfers expensive, though in some cases, incorporation relief may apply if you run a genuine property business with multiple properties.

Final thoughts

Buying a house through a limited company is a smart move for many landlords, but it comes with extra costs and responsibilities. The benefits are most significant for higher-rate taxpayers, long-term investors and those building property portfolios.

Before moving forward, speak to an accountant or property tax specialist to check if a limited company structure is right for you. With the right planning, it can be a powerful way to grow your property business in a more tax-efficient way.