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Samuel Phillips Law

Buy-to-let property investment

House with the words buy to let surrounded by keys

Friday, September 15, 2023

Should you purchase a buy-to-let property investment in your name or in a property investment limited company?

Since 2017 there has been an increase in the number of landlords buying property in a limited company (LTD) rather than personally.  The reduction in the amount of tax relief available for interest on buy-to-let mortgages proved to be the catalyst for the move from personally held property investment to using an LTD. A limited company pays corporation tax, while an individual landlord pays income tax.

Your conveyancer will need to make several checks on the limited company the property is being bought through to ensure that it’s legally entitled to hold property. All company directors must provide proof of their identity, such as a passport or a photo card driving licence. Shareholders with over 25% of the company’s issued capital must also provide proof of their identity and he company’s Memorandum and Articles of Association set out and regulate the internal affairs of the company.

If you are obtaining a mortgage, many lenders require that company directors personally guarantee any mortgage they take out, so it’s vital they seek legal advice to fully understand the implications of doing this, along with any possible liabilities they could face. This advice generally needs to be taken from a solicitor who’s totally independent from the property transaction. The solicitor will also need to confirm to the lender this advice has been provided before the mortgage advance can be released.

In addition to these checks, the conveyancer will need to carry out all the relevant searches on the property the company is buying, including Land Registry searches, local authority searches, environmental searches, water authority searches, and location specific searches.

It can be a complex procedure and involves a lengthier conveyancing process, as there are additional checks your conveyancer will need to make compared to purchasing a property directly. It can also involve extra costs, so it’s important to understand exactly how the process is likely to work before proceeding.

Please get in touch if you are considering purchasing a property in a company name and we can help with any guidance or advice you may require on 0191 255 0255 or email


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