Property SPVs: Set Up, Costs and Selling the Shares

By Andy Smith, Director · 23rd October 2026

We get asked about SPVs a lot. Usually it starts with a landlord who has heard that a limited company saves tax, or a buyer who has been offered a property "in a company" and wants to know if that's a good thing. The short answer is that an SPV can work really well, but only if it's set up for the right reasons and done properly from day one.

This guide walks through how an SPV works, what it costs, the tax on the way in, the tax while you own it, and one of the most useful benefits that people often miss: selling the company instead of the property.

What is an SPV?

SPV stands for special purpose vehicle. In property, it simply means a limited company set up to do one thing: buy, own and let property. Nothing else goes through it. No trading, no staff, no other business.

Lenders like them because they're clean and easy to understand. Most SPVs use the Companies House code 68209 (other letting and operating of own or leased real estate), and some lenders insist on it.

Setting up an SPV

• Form the company at Companies House, with the right code and share structure
• Directors and people with significant control now need to verify their identity with Companies House
• Open a business bank account in the company's name
• Agree how the deposit goes in, usually as a loan from you to the company (a director's loan account)
• Arrange a limited company buy to let mortgage. Most lenders will ask for personal guarantees from the directors
• Register the company for corporation tax with HMRC

The share structure is worth getting right at the start. Who owns the shares decides who gets the dividends and who owns the value on a sale. Changing it later can trigger tax, so think about spouses, children and future plans before you form.

What does it cost?

Companies House fees from 1st February 2026. Limited company mortgage rates are often a little higher than personal ones, so always compare the full cost over the term, not just the headline rate.

Buying a new property through an SPV

This is where SPVs are at their best. If you're buying a new rental property, buying it in the company from the start avoids most of the costs of moving one in later.

Stamp duty is usually the same as buying personally. Since 31st October 2024, both companies and individuals buying an extra residential property in England pay the 5% surcharge on top of the normal rates. On a £350,000 property that's £25,000 either way.

Moving a property you already own into an SPV

This is the part that catches people out. Moving a property you own personally into your own company is treated as selling it at today's market value. That can mean two tax bills before you've saved a penny.

Worked example: moving an existing property in

A higher rate taxpayer bought a rental flat in 2014 for £180,000. It's now worth £350,000, with a £150,000 mortgage.

For one or two properties, that cost usually wipes out years of savings. There are reliefs that can help, but they come with strict rules:

• Incorporation relief can defer the capital gains tax, but only if the letting is a genuine business. The key case involved an owner spending around 20 hours a week running 10 flats. A landlord with a letting agent and a couple of properties will rarely qualify. For transfers on or after 6th April 2026, the relief also has to be claimed in your tax return. It no longer applies automatically.
• Partnership relief can reduce stamp duty, sometimes to nil, where a genuine property partnership already exists. HMRC expects proper substance, such as partnership returns and accounts going back years, and looks hard at partnerships set up just before a transfer.

If you have a larger portfolio, it's worth a proper review. If you have one or two properties, it's often better to keep them where they are and buy future properties in the company.

Owning the property: personal vs company

The big difference is mortgage interest. Personally, you can't deduct it from your rent. You only get a 20% tax credit. A company deducts the interest in full, then pays corporation tax on what's left.

Worked example: one year of rent

Rent of £19,200 a year, £2,700 of running costs and £7,500 of mortgage interest, owned by a higher rate taxpayer.

Personal: £16,500 at 40% is £6,600, less a £1,500 credit on the interest. SPV: £9,000 profit at the 19% small profits rate. From April 2027, tax on personal property income goes up by two percentage points (22%, 42% and 47%), which widens the gap further.

The catch is that the money is in the company. If you take it out as a dividend, a higher rate taxpayer pays 35.75% on it (2026/27 rates, after the £500 dividend allowance). On the £7,290 above, that leaves about £4,860. That's still ahead of owning personally, but by less than the headline suggests.

There's also the paperwork. Since 6th April 2026, landlords who own property personally and have over £50,000 a year of rental and self-employed income, before expenses, must use Making Tax Digital, keeping digital records and sending HMRC updates every quarter. The limit drops to £30,000 from April 2027 and £20,000 from April 2028. A company isn't caught by this. It files its accounts and corporation tax return once a year.

SPVs work best when you leave the profit in the company to pay down the mortgage or fund the next deposit. If you need every pound of rent to live on, the advantage is much smaller.

Selling the shares instead of the property

This is the benefit people often miss. When you own the property in a company, you have two ways to sell. You can sell the property, or you can sell the company that owns it.

Worked example: selling after eight years

An SPV bought a flat for £350,000. It's now worth £450,000, with a £150,000 mortgage. The owner put in £225,000 for the deposit and costs, as a loan to the company. The owner is a higher rate taxpayer.

On a share sale, the sale price is made up of the £75,000 paid for the shares, the owner's £225,000 loan being repaid, and the £150,000 mortgage being cleared or refinanced by the buyer. Stamp duty of 0.5% is only charged on the price of the shares. Closing costs are an estimate for a members' voluntary liquidation. The owner's loan comes back tax free either way. Corporation tax uses marginal relief between the 19% and 25% rates. Capital gains tax is at 24%, after the £3,000 allowance. Closing the company with over £25,000 left in it needs a members' voluntary liquidation for the cash to be taxed as capital rather than as a dividend. Figures ignore agent and legal fees, and are an illustrative example rather than a real client.

At the same £450,000 price, the buyer saves £34,625 in stamp duty and the seller keeps £21,290 more. The total tax is roughly cut in half.

Things to think about before selling the shares

• The buyer gets the company's history. They'll want to check every tax return, set of accounts, tenancy and deposit. Expect two to four months and a proper legal agreement.
• Warranties and indemnities. You'll be asked to promise there are no hidden problems, and to cover any old tax bills that turn up. Clean records make this much easier.
• The mortgage. Most company mortgages have a change of control clause, so the lender has to agree, or the buyer refinances on completion.
• Fewer buyers. Not everyone wants to buy a company. Share sales are most common between investors and landlords who already use SPVs.
• No entrepreneurs' relief. Business Asset Disposal Relief is usually not available on a letting company, because letting is treated as investment, not trading.
• Legal costs. A share sale needs a share purchase agreement and more due diligence, so legal fees are higher than a normal property sale.

Other things to think about

• Inheritance tax. Shares in a property letting company don't usually qualify for business relief, so an SPV doesn't take the property out of your estate.
• Getting money out. Plan how you'll be paid: repaying your loan first, then dividends, and possibly pension contributions from the company.
• Scotland and Wales. They have their own versions of stamp duty, with different rates and reliefs.
• Records. Keep the company clean and the paperwork tidy from day one. It makes a future share sale far smoother.

This article covers tax and process points only and is based on the rules for England and Northern Ireland as at 23rd October 2026. It isn't financial or investment advice. Tax rules change, so speak to us about your own situation before acting.