Buying a property through a Limited Company

Whether you’re a contractor, business owner or independent professional operating via a Limited Company, you might have already thought about buying a property through your business.

This way of tapping into the property market is not uncommon, however, there are lots advantages and disadvantages of purchasing a property in this way that is certainly worthwhile weighing up before making your final decision.

With this in mind, it’s always worthwhile seeking professional advice before making a final decision. 

What are the benefits of purchasing a property through a Limited Company?

One of the main advantages of purchasing a property through a Limited Company is that

it can be one of the most tax efficient ways to buy. For example, if you choose to invest a property through your Limited company, the profit you make will be liable to Corporation Tax, which is currently 19% on company profits.  However, you should keep in mind that this could have an impact on the amount of tax you personally pay.

What are the disadvantages of buying through a limited company?

One of the main disadvantages of buying through a Limited Company is that many buyers struggle to find a suitable lender. Why? The vast majority of buy-to-let lenders will not lend to limited companies as they see it as a risk.

And, the lenders that will lend often insist on a personal guarantee from the directors of the company.

When it comes to deciding whether to purchase a property in this way, you should consider:

How much income tax do you pay?

If you are higher or additional rate taxpayer, you will have to pay income tax at 40-45%.  However, if you purchase a property through a Limited Company, you will only be subject to pay corporation tax, which is currently 19%.

Do you have enough cash in your business?

Before contemplating purchasing a property through a Limited Company, you will need to ensure that you have enough cash in the business. After all, many lenders do not like to lend to limited companies, so limited funds will definitely not go in your favour.

What is the investment for?

If you are planning to invest in a property for your children as inheritance, purchasing through your Limited Company is a great option as there are a number of ways to make Inheritance Tax savings purchasing this way.

Why React Accountancy?

Here at React Accountancy, we provide trusted accountancy services to start-up, established and multi-national businesses across a diverse range of industries.

From the moment you get in touch, our approachable, friendly and professional team will go above and beyond to ensure that you receive the right advice, support and accountancy solutions for your business.

All of our team has years of experience in providing accountancy services that support your business including complex financial issues.

Get in touch today for further information about any of our services.

You can reach us on 01914324110 or contact us via email using