Buying property does not always mean buying bricks and mortar. In many high-value commercial and portfolio deals, investors choose to purchase the company that owns the property instead. This is the difference between an asset purchase and a share purchase.
When you buy a property directly, you acquire the physical land and buildings. When you acquire a property through a Share Purchase Agreement, you step into the shoes of the previous owner by taking over the shares of the Special Purpose Vehicle that holds the title.
We see the SPA not just as a legal document but as a sophisticated structuring decision. It is a method used to fund complex acquisitions, build portfolios with greater agility and protect wealth through corporate ring-fencing. Because you are buying a company with all its history and potential baggage, the margin for error is slim.
What is a Share Purchase Agreement?
An SPA is a legally binding contract that outlines the terms and conditions for the sale and purchase of shares in a company. In property, that company is almost always an SPV whose sole purpose is to hold a specific building or portfolio.
Key components:
· Buyer and seller identities, defining who is exiting and entering the corporate structure.
· The purchase price, calculated as net asset value (property value less liabilities plus assets such as cash in the company bank account).
· Conditions precedent, such as obtaining lender consent or clearing planning hurdles.
· Warranties and indemnities, the protections that ensure the seller is telling the truth about the company's past.
· Post-completion covenants on what happens after the shares change hands.
What is an SPV in property investment?
An SPV is a limited company formed specifically for a single project or to hold a specific asset. Investors use them for risk segregation, legal separation and ease of transfer. When you acquire property company shares, you are essentially buying a wrapper. The building sits inside that wrapper. UK lenders have become very comfortable with SPV structures, particularly since tax changes made personal ownership less efficient for many professional landlords.
Why investors use an SPA
Continuity of ownership: when an SPV changes hands via an SPA, the legal title at the Land Registry does not change. The company remains the owner. This can be a major advantage if the property has complex licences, ongoing utility contracts, or sensitive tenant relationships that would be a nightmare to assign.
Speed and efficiency: in some high-stakes commercial deals, buying SPV property company structures can be faster than a traditional sale because the entity remains the same.
Corporate structuring benefits: for portfolio landlords, keeping assets in a corporate structure allows easier inter-company lending, profit reinvestment and future share transfers.
Due diligence: the deep dive
In a standard property purchase your solicitor checks bricks and mortar plus local searches. With shares, that is only half the job. You also buy the company's history, including any hidden debts, legal disputes or unpaid taxes.
Property-level: structurally sound? Leases valid? Planning consent in order?
Company-level:
· Shareholder identity: are the sellers the legal owners? Any shadow directors or undisclosed beneficiaries?
· Trading history: has the company done anything other than hold this property?
· Existing liabilities: undisclosed loans, directors' loan accounts, outstanding contractor invoices?
· Employees: under TUPE, employees transfer with the company.
· Environmental risks: the company can remain liable for sites it once owned that have since caused contamination claims.
Always use a corporate lawyer who understands property, not a residential conveyancer. Due diligence is where you protect yourself from the skeletons in the closet.
Warranties, indemnities and protections
Warranties are statements of fact made by the seller, for example that the company has no outstanding tax liabilities. If you discover otherwise after the sale, you can sue for breach of warranty.
Indemnities are promises to reimburse the buyer for a specific known risk. If a potential issue surfaces during diligence, the seller may give an indemnity that pays out pound for pound if the issue costs you money later.
W&I insurance is increasingly common in larger SPA deals. The seller can walk away cleanly while the buyer has an insurance policy to claim against if a breach is discovered later.
Financing an SPA acquisition
Financing a share purchase is fundamentally different from a standard mortgage. The lender funds the purchase of a corporate entity that in turn owns the property.
Lender appetite: not all lenders have the infrastructure to support SPA finance. High-street banks often struggle with corporate complexity, so investors usually look toward specialist and commercial markets.
LTV assessment: the lender still values the underlying property, but LTV is often calculated against the lower of property market value or share purchase price. If you have negotiated a discount because you are taking on latent tax liabilities, the lender will examine how that debt sits alongside their mortgage.
Bridging vs term lending: many investors use a bridge for a quick share acquisition and then term out into a 5- or 10-year mortgage once the corporate structure has stabilised. Personal guarantees from directors are standard.
Tax considerations (high level)
SDLT vs stamp duty on shares: a standard asset purchase attracts SDLT on the property price, which can be significant for commercial or high-value residential. Buying shares typically attracts stamp duty at 0.5%. SDLT figures are subject to change and we always recommend verifying with HMRC and your tax adviser before relying on them.
Latent capital gains: when you buy the shares of a company you inherit its tax history. If the company bought the property for £100k ten years ago and it is now worth £1m, there is a latent capital gains liability inside the company. If you sell the property later, the tax is calculated from the original base, not the price you paid for the shares.
Robust tax warranties are essential. The seller should confirm that all VAT, corporation tax and PAYE have been paid up to completion.
Risks investors often overlook
Hidden liabilities: off-balance-sheet items such as long-term service contracts with auto-renewal clauses, or historic litigation from a former tenant that has not yet reached court.
Environmental claims: a company that owned a contaminated site decades ago can still receive a remediation notice today.
Planning irregularities: conversions done without correct planning permission leave the company liable for enforcement, and that liability is harder to untangle inside a share structure.
Overestimated tax efficiency: if corporate diligence and specialist legal fees exceed the stamp duty saving, the SPA may not be the most efficient route.
When an SPA structure may be appropriate
Portfolio acquisitions: buying ten properties at once held in a single SPV is often cleaner and faster than ten individual title transfers.
Stabilised SPVs: a property already performing well, with a long-term commercial tenant and a clean management history, allows for a seamless handover.
Development companies: buying SPV structures that already hold the necessary planning consents can jump-start a project by months.
Frequently asked questions
What is a share purchase agreement in property?
A contract where you buy the shares of the company that owns a property, rather than buying the property itself. You inherit the company's assets and its liabilities.
Is SDLT payable on an SPA?
Technically you pay stamp duty on the shares (usually 0.5%) rather than SDLT on the property. This is a complex area and SDLT figures are subject to change. Always verify with HMRC and seek professional tax advice before proceeding.
Can lenders finance an SPA?
Yes, but it requires a specialist commercial lender. They perform a dual-track underwriting process, looking at both the property value and the corporate health of the SPV.
What is an SPV in property investment?
A Special Purpose Vehicle is a limited company set up solely to hold a property asset. It keeps the investment separate from your personal finances and other business interests.
Are personal guarantees required?
In almost all cases yes. Lenders want to ensure the directors are personally accountable, especially when taking over a company with a previous history.
Is buying shares better than buying the property?
There is no single answer. It offers lower stamp duty and better continuity, but higher legal costs and more hidden risk. It depends entirely on your long-term strategy and the specific deal.
Last updated: 10 May 2026