BUYING A PROPERTY COMPANY

What buyers and sellers need to know.

Why This Strategy Deserves Attention

There are three main ways investors tend to acquire property. The first is the most familiar – purchasing a single property outright. The second involves buying a portfolio of properties from the same seller, whether that seller is an individual or a limited company. The third, and far less common approach, is to purchase the company that already owns a portfolio of properties.

At WalterFrank, we’ve noticed growing interest in this third option. Rather than buying properties one by one, investors are looking at acquiring the company itself – a strategy that can be unconventional, but highly effective for both buyers and sellers. In this guide, we’ll explore how it works, the benefits, the risks, and what to keep in mind when approaching such a transaction.

How Buying a Property Company Works

Instead of purchasing the properties themselves, you’re buying the shares in the company that owns them. On paper, the properties don’t change hands – the company remains the legal owner – but you now own the company.

It sounds simple, but it comes with unique advantages and risks that make it very different from a straightforward property purchase.

Benefits for Buyers

Saving on Transaction Taxes

At the moment, Stamp Duty Land Tax (SDLT) is one of the biggest hurdles for property investors. With the investor surcharge recently increased to 5% and Multiple Dwellings Relief scrapped, the upfront costs of buying property directly have become eye-watering.

A simple example

Buying £2m of property at 50% Loan-to-Value would currently trigger around £253,750 in SDLT – a 12.69% effective tax rate.

Buying the shares of the company that owns those same properties? The Stamp Duty on shares is just 0.5%. That’s only £10,000.

And if you base the price on the company’s Net Asset Value (say £1m in this example), you’re looking at just £5,000 in Stamp Duty.

That’s a staggering difference!

Other Key Advantages

Beyond tax, there are several other reasons buyers consider this approach:

Rapid portfolio growth – one deal can give you exposure to multiple properties.
Single transaction – you’ll only go through one legal process, though it will be more complex and expensive than a single-property purchase.
Flexible financing – there may be more options than just a standard mortgage.
Continuity – because the properties remain in the same company, existing banking arrangements, HMO licences, or other regulatory approvals may stay in place (though councils and lenders vary on this).
Systems and staff – in larger companies, operational structures or employees may already be in place.

The Risks for Buyers

For buyers, this route isn’t without its pitfalls, as taking on a property company brings unique risks that need careful consideration.

While there are two notable negatives for buyers, the positives still tip the balance in favour of purchasing property companies.

Historic Liabilities

When you buy the company, you inherit everything that comes with it – the good and the bad. That means historic liabilities, contracts, or legal issues.

Strong legal due diligence and carefully drafted warranties are critical. If anything worrying comes up, you can always renegotiate the price.

No cherry-picking

You’re buying the company, not selecting individual properties. If the portfolio includes weaker assets, you’ll have to take them on.

The silver lining? Poorer-performing properties can often be improved, repurposed, or sold later. Most buyers accept that no portfolio is perfect.

The Benefits for Sellers

Now let’s flip to the seller’s perspective. Why sell the company rather than the individual properties? Three important benefits are:

Clear exit from historic liabilities – the buyer takes on the company as it stands.
One buyer, one deal – much easier than drip-feeding sales to multiple parties.
Timing your exit – you can structure the sale to capture the best possible value in one go.

Other key upsides

There are often additional tax advantages too, but these depend heavily on personal circumstances.

Also, for many owners, there’s an emotional aspect as selling the company intact means their years of work live on, rather than being broken up. This is relevant for a trading company or a property holding company.

The Risks for Sellers

Compared to buyers, the risks are relatively few – but they do exist.

There’s always the risk that if a buyer pulls out, you could miss the opportunity to sell individual properties at the right time. In addition, selling a company is naturally more complex than selling single houses, especially when employees are involved.

That said, the potential to secure a clean exit, a single negotiation, and attractive tax treatment often makes the extra effort worthwhile.

Final Thoughts

Buying or selling a property company isn’t the “standard” route – but it can be a powerful strategy for both sides of the table.

For buyers, the tax savings alone can be game-changing, and the ability to scale quickly is unmatched. For sellers, it offers simplicity, a clean break, and often better financial outcomes.

But – and this is important – it comes with added complexity. Both parties need strong legal support and a clear understanding of what they’re taking on.

Handled well, though, it’s a win-win.

If you'd like to find out more about buying or selling your property company, then get in touch.

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