The Investor’s Guide to Buying Property with a Limited Company

Buying property through a limited company has become increasingly popular among UK and overseas investors — and for good reason.

Whether you’re a first-time buyer or scaling your portfolio, understanding the difference between buying in your personal name versus a limited company could save you thousands in tax, boost your returns, and offer long-term flexibility.

In this guide, we’ll break down the benefits, considerations, and what you need to know before making your next investment.

Why Are More Investors Using Limited Companies?

Until a few years ago, most landlords bought properties in their personal name. But changes to mortgage interest tax relief and tightening of personal income tax laws (especially Section 24) have made it less efficient for higher-rate taxpayers to build rental portfolios this way.

Here’s why limited companies are now the go-to route for many:

1.

Tax Efficiency

One of the biggest draws of using a limited company is the tax structure.

• Corporation tax is currently 19–25%, depending on profit — often lower than the 40–45% personal income tax for higher earners.

• You can deduct mortgage interest as a business expense in a company — unlike in your personal name.

• Profits can be retained within the company and reinvested without being taxed personally — ideal if you’re growing a portfolio.

This makes a huge difference in net returns over time, especially if you’re planning to hold multiple properties.

2.

Easier to Scale

When investing through a limited company:

• It’s easier to ring-fence income and expenses, making your business more appealing to lenders.

• You can build a professional track record that helps with refinancing and commercial lending down the line.

• Lenders often assess your company’s finances instead of personal affordability — a benefit if your income is irregular or overseas.

Plus, multiple investors can co-own shares in the company — helpful if you’re partnering with others.

3.

Better for Inheritance and Exit Planning

Using a limited company gives you more control over:

• Gifting shares to family members

• Reducing inheritance tax liability

• Structuring long-term exits without selling properties outright

This is a big plus for landlords thinking long-term and looking to build generational wealth.

4.

Ideal for Overseas Investors

For non-UK residents, a limited company makes UK investing more accessible:

• Clear legal structure

• Easier to set up a UK bank account

• No need to rely on personal residency or income for mortgage approval

• Simplifies tax reporting with a UK-based structure

At Manchester Sourcing, we help overseas investors set up UK companies and bank accounts as part of our turnkey service.

What to Consider Before Buying Through a Limited Company

It’s not one-size-fits-all. There are downsides too:

• Mortgage rates for limited companies are typically higher than personal BTL mortgages (though this is narrowing).

• There are more legal and accountancy costs, including company setup, annual filings, and tax returns.

• You may pay capital gains tax if transferring personally owned properties into a company — this needs proper tax advice.

We always recommend speaking to a specialist property accountant to run the numbers before making a decision.

Setting Up a Limited Company: What You’ll Need

1. Company formation — usually a Special Purpose Vehicle (SPV) with a SIC code related to property letting/investment.

2. UK business bank account — especially important if you’re based overseas.

3. Registered address and directors — can be UK or overseas-based.

4. Accountant — ideally one familiar with property to handle your filings and offer guidance.

We support investors through every step — and introduce you to trusted accountants, mortgage brokers, and solicitors who specialise in property.

Final Thoughts

If you’re planning to build a portfolio, buy multiple properties, or invest from overseas, buying through a limited company could be a smart move — offering better tax efficiency, scalability, and long-term planning options.

But it’s not always the right approach for everyone. It depends on your income, goals, strategy, and how long you plan to hold your investments.

At Manchester Sourcing, we help investors assess what structure makes sense, connect them with trusted professionals, and handle everything from sourcing the deal to tenanting the property.

Want to find out if a limited company is the right route for you?

Get in touch — and we’ll help you make a clear, informed decision.