Buying the company instead of the block: when a share purchase makes sense
On a big enough block, buying the limited company that owns it can save serious stamp duty and open up funding a normal purchase cannot. It also hands you everything the company has ever done. Here is how to tell which side of that line a deal sits on.
The short answer
A share purchase means buying the limited company that owns the block, not the block itself. Two things make it attractive on the right deal. Stamp duty: when you buy shares you usually pay 0.5% on the transaction (GOV.UK, checked November 2026), not Stamp Duty Land Tax on the building, which on a large block can run to tens of thousands. And funding: some lenders treat a company purchase more like a refinance than a purchase, which can open up borrowing a straight purchase cannot.
The catch is just as big. You do not buy a building, you buy a company, with every tax bill, claim and decision it has ever had. My rule of thumb: worth a look from around £1 million, very likely worth it at £2 million, case by case below that.
Why the price point matters
The stamp duty saving grows with the size of the deal. The extra costs and risks do not shrink to match. On a small block, the corporate legal work and the due diligence can eat most or all of the saving, and you have taken on a company's history for nothing. On a big one, the saving clearly outweighs them.
It also suits a long hold, not a quick flip. The risk of something old surfacing in the company matters less the longer you keep it, and when you do eventually sell, you can sell the company itself as a going concern: a fully run, cash-generating business, which a future buyer may well want for exactly the reasons you did.
What it really costs
This is not a normal conveyance. You still need the property legal work, and on top of it a corporate solicitor running what is effectively a small company acquisition. On deals we have worked through, the legal bill came to roughly £27,000, around £20,000 of it the corporate side, against a few thousand for a standard purchase. Add forensic accounting on the company, around £2,000 in our worked example. Those are our working figures from real deals, not quotes: get your own.
How the numbers can work with a split
Here is the version that gets people's attention. Buy the company for £1 million, where the flats inside it are worth £1.4 million as individual split flats. A lender that will lend 75% of the split value lends £1.05 million. That covers the £1 million price and leaves around £50,000 towards the costs, which on our worked example came to roughly £43,000. Very little of your own money left in.
It only works if a lender will actually do it on those terms, and lender appetite for share purchases changes. Some want an existing director to stay on with a token shareholding for a period after the sale, which is mostly a box-ticking condition but does mean the seller has to know exactly what you are planning, including the split. Get your broker to confirm the lender's terms before you agree the deal.
The due diligence is forensic, not standard
Standard property due diligence is not enough. You are looking for the skeletons in the closet: tax the company owes but has not yet paid, an accident claim, a mis-sold product, a past transaction nobody mentioned. Have the accounts and the company's history properly examined before you commit.
- Warranties and indemnities. Your corporate solicitor's job is to get promises from the sellers about the state of the company, with the right to claim if those promises turn out to be untrue. On one deal the director had died and the executors knew nothing about the company's history, so that protection was much weaker. Factor that into the price.
- Unpaid tax as a negotiating lever. Tax the company has built up but not yet paid comes with it. Have an accountant put a number on it, then use it. On one deal, a figure of around £94,000 came straight off the price: the seller avoids the bill, and you price it in.
Splitting inside the company
You cannot simply grant leases into the same company that holds the freehold, and moving the flats into an unconnected company can mean paying stamp duty again. The usual answer is a group: a holding company with the freehold, and a subsidiary taking the leases, with the same directors throughout. The detail is in the title split process, step by step.
One warning. Taking a company out of a group later can claw back relief you claimed on the way in. Before you set up the structure, and certainly before you change it, get proper advice.
Who to ask
For the tax, a chartered tax adviser, not the solicitor. Do not assume the stamp duty figure on a completion statement is right on a deal like this; have it checked. For the company itself, a corporate solicitor who does acquisitions, alongside your usual property solicitor. And a broker who has placed share purchase lending recently, because the lenders that will do it change.
The decision in one line
On a block over about £1 million that you mean to hold, a share purchase can save a large stamp duty bill and help the funding. Below that, or on a short hold, the legal cost and the company's unknown history usually make buying the building the better deal.
Questions people ask about buying a property company
What is a share purchase in property?
Instead of buying the building, you buy the limited company that owns it. The building stays in the same company; what changes hands is the shares. You become the owner of the company and everything in it, including its history.
How much stamp duty is there on buying a property company?
When you buy shares you usually pay 0.5% duty on the transaction (GOV.UK, checked November 2026), rather than Stamp Duty Land Tax on the property itself. On a large block that can be a big difference. Confirm the position on your own deal with a chartered tax adviser.
When is a share purchase worth it?
In our view it is worth a look from around £1 million, very likely worth it at £2 million, and case by case below that. The duty saving grows with the price; the extra legal cost and the risk of the company's unknown history do not shrink.
What are the risks of buying a property company?
You inherit the company's past: unpaid tax it has not yet settled, claims against it, and anything it did that was never disclosed. That is why the due diligence has to be forensic, and why warranties and indemnities from the sellers matter.
Can you title split after a share purchase?
Yes, but the structure matters. A lease cannot simply be granted into the same company that holds the freehold, so the usual answer is a group: a holding company with the freehold and a subsidiary taking the leases, with the same directors. Take tax advice on the group before you set it up.
Got a block in mind?
Book a free fifteen minute call and tell me about it. I will tell you straight whether it looks like a split worth doing, what would get in the way, and what to check before you spend a penny.
Related reading
- The title split process, step by step. The three routes, and the two-company structure every split needs.
- Can you get a mortgage on individual flats in a split block? Including how lenders treat the share purchase route.
- Vendor finance on a block of flats. How deferred consideration works, and how to put it to a cautious seller.
- How much does a title split cost? Every line of the bill, with the figures we use in our own deal stacking.