It is possible to buy investment properties, including holiday lets, via an existing business and also with a Special Purpose Vehicle (SPV) company. Here we provide an overview of these 2 options.

Buy a holiday let

Existing trading company

You can purchase a holiday let through your existing trading business, provided your business is a trading limited company. If your business is not a limited company then you are treated as a private individual for the purchase. You can buy a single unit holiday let property or a complex of units or a holiday let business which is also a trading limited company. You will be eligible provided that your current company organises the correct or additional Companies House SIC code (68209 is for “letting and operating of own or leased real estate”).

Accountants, acting for their clients who own trading limited companies, will understand the benefits of the purchase of a holiday let businesses or property through their client’s company. There can be considerable tax and other advantages to this recommendation.

One of the significant issues is SDLT. If your existing limited company buys one or more holiday lets which are themselves not in a limited company then the higher rates of SDLT are payable, as they would be for a private individual. Any residential property that is purchased with a view to be let, incurs the charge. Properties restricted to holiday let use only, which ties them to the use, are still hit by this SDLT surcharge; unlike other commercial property.

However, if the property(ies) that you are buying are already in a limited company and many larger holiday businesses are owned by limited companies, there is an alternative way of purchasing these without triggering an SDLT event. Purchasing the property directly as a company asset will trigger an SDLT event, BUT purchasing the limited company itself, necessarily including all its assets and including the property(ies), by buying all the shares of that company will not trigger the 3% charge.

SDLT is payable but only at the rate payable on the purchase of the shares i.e. 0.5% on the entire purchase price. This method is not an avoidance measure, it’s a non SDLT event. A share purchase works because at the land registry the title deeds do not change because the current limited company still owns it. The change takes place at Companies House which shows that you now own the company. Cost savings can of course be significant.

Before diving in further there are 2 important points to consider:

  1. Most lenders prefer lending to an SPV company rather than a trading company so your choice of lenders reduces.
  2. Should at some future point you wish to sell your trading business, it will of course own the holiday let properties. This could be a bit difficult (and costly) to disentangle before proceeding with the sale.

Special Purpose Vehicle (SPV)

More and more property investors are realising the benefits that a Special Purpose Vehicle (SPV) can bring. Additionally many more lenders are accepting mortgage applications from SPV’s.

By using an SPV you provide separation between any trading companies and other business assets.

In the scenarios above purchasing through a limited company (as an SPV) can also be very attractive on sale, as the purchaser can opt for the share purchase route. This of course can put the company vendor in a very strong negotiating position.

What is an SPV?

A Special Purpose Vehicle (SPV) limited company is one which is set up just to hold investment property and not to undertake normal business trading activities. A new SPV needs to be registered with Companies House and will need shareholders and directors.

You will need to ensure that the SIC code is set up correctly as lenders will be checking this.

Due to the Section 24 changes which mainly affect buy to let investments many property investors are now moving over to the SPV route.


Before making any changes or property purchases we recommend that you seek advice from an accountant who is familiar with holding property within limited companies and SPV’s.

Additionally, Furnished Holiday Lets (FHL) also need experienced and specialist accountancy to ensure they properly qualify for the holiday let tax rules.

Author: Mark Lanario & Sean Horton