If you’re investing in property, you’ve probably heard about using a limited company to do it. More and more landlords in the UK are setting up companies to buy and hold rental properties.
Why? Because it can be more tax-efficient, it limits your personal risk, and it’s often better for inheritance planning.
We’ll walk you through exactly how to buy property through a limited company, step by step.
Why Use a Limited Company to Buy Property?
Here are the main reasons investors choose to use a limited company for property:
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Tax benefits – You can offset mortgage interest and other costs more easily
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Limited liability – Your personal assets are protected if something goes wrong
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Inheritance planning – It is usually easier to pass on company shares than individual properties
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Professional structure – Helps when scaling a portfolio or attracting joint venture partners
This setup is especially popular among higher-rate taxpayers and those looking to build a portfolio of two or more properties.
Step 1: Set Up a Property Investment Company
First, you need to register a limited company. This is much easier than most people expect.
Here’s how to do it:
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Go to the Companies House website and complete the online form
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Choose any company name (you can always change it later)
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Use SIC code 68209, which covers “other letting and operating of own or leased real estate”
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The cost is around £50
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Registration usually takes 24 to 48 hours
If the company will only hold property, it is often referred to as an SPV (Special Purpose Vehicle). This makes things easier when applying for mortgages.
Step 2: Open a Business Bank Account
Once your company is registered, you’ll need a business bank account in its name. This keeps your finances separate and is required by most lenders.
To open one, you’ll need:
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Your company registration documents
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Proof of ID and address for the directors
This account will be used for rent collection, paying expenses, and handling mortgage payments.
Step 3: Get a Limited Company Buy-to-Let Mortgage
Now that your company is ready, it’s time to finance your property purchase.
Many lenders offer buy-to-let mortgages for limited companies, even if the company is brand new.
Here’s what to know:
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You may need a slightly larger deposit than with personal mortgages (often 25 percent or more)
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Interest rates can be a bit higher, but tax savings often offset this
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Most lenders are fine with newly formed companies, especially SPVs
Using a mortgage broker who specialises in limited company buy-to-let mortgages can save you time and money. They will know which lenders are open to working with landlords like you.
Step 4: Understand the Tax Implications
This is where the real benefits of using a company start to show.
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You’ll pay corporation tax (currently 19 percent) on profits instead of income tax
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You can fully deduct mortgage interest as a business expense
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You can choose how and when to take money out, either through salary, dividends, or reinvestment
Keep in mind, when you withdraw profits, you might pay dividend tax, depending on how much you take out. A qualified accountant can help you plan this in the most efficient way.
Step 5: Keep Up With Your Company Obligations
Running a limited company comes with some admin. Do not worry — it is manageable, especially with the right support.
Here’s what you need to do each year:
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Submit annual accounts to Companies House
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File a corporation tax return with HMRC
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Keep proper records of income and expenses
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Possibly pay yourself through payroll if taking a salary
Most landlords hire an accountant to take care of this, which is a smart move, especially as your portfolio grows.
Should You Buy Property Through a Limited Company?
If you are investing in just one or two properties and are a basic-rate taxpayer, personal ownership might still work well. But if you are:
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A higher-rate taxpayer
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Planning to build a property portfolio
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Looking for better long-term tax control
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Interested in making inheritance easier
Then buying property through a limited company could be the right strategy for you.
It gives you more flexibility, protects your personal finances, and opens up different tax planning options.
Final Thoughts
Setting up a company to buy property is not just for big developers. It is fast, affordable, and gives you more control over your investments.
Once your company is registered, you could be mortgage-ready in just a few days. With the right structure in place, you will be better positioned to grow your portfolio and keep more of your profits.
If you're serious about property investing, this is a path worth exploring. Just make sure you get advice from a qualified accountant or mortgage broker to do it properly.
Want Help Getting Started?
We can help you find the right accountant, broker, or company structure for your property goals.