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Refinancing a buy-to-let property or portfolio after acquiring it via a company share purchase agreement is a common next step for property investors. This process involves refinancing the company’s property assets, held within a limited company, once the ownership of the company has changed hands.
What Is a Limited Company Share Purchase?
Instead of buying a property directly, a company share purchase involves acquiring the shares of a limited company that already owns the property. This method allows the buyer to take control of the property indirectly by taking ownership of the company.
It can be a tax-efficient strategy because:
- Stamp duty is charged at 0.5% on share transfers, which can be significantly lower than standard SDLT rates
- The property title remains unchanged, potentially reducing legal costs and processing time
Once the shares are acquired, the investor becomes the director/shareholder of the property company and can then seek refinancing options as needed.
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Why Refinance After a Share Purchase?
Refinancing allows the new owner to replace the original finance, which may have been a bridging loan or a specialist mortgage, with a long-term buy-to-let product. This can provide more competitive rates, improve cash flow, and align with the investor’s portfolio strategy.
- Bridging loans are designed to be short-term and require a clear exit strategy, typically within 6 to 12 months.
- Specialist mortgages used for limited company share purchases may also be less favourable long-term, making refinancing a logical next step.
The good news is that the refinance process closely mirrors a standard buy-to-let remortgage.
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What Does the Refinance Process Involve?
1. Update Companies House
After the company has been acquired, Companies House must be updated with the new director and shareholder information. Most lenders will not proceed until this has been completed and reflected on official records.
2. Understand Timing Requirements
Some lenders are happy to refinance shortly after the share acquisition. However, many of the lowest-cost lenders, such as building societies, may require that the new shareholders have owned the company for at least six months. Each case is reviewed individually by the lender.
3. Valuation and Legal Process
A standard valuation of the property or portfolio will be required as part of the lender’s due diligence. Legal checks will cover both the property and the limited company. Standard valuation and legal fees apply.
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Key Things to Know
- This is a refinance of a property-owning limited company, not a personal remortgage.
- The process is similar to refinancing any other SPV buy-to-let mortgage.
- Share acquisition details must be correctly recorded at Companies House.
- Timing and lender selection depend on how long the company has been under your ownership.
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How Advocate Finance Can Help
We specialise in arranging mortgages and refinancing for property-owning limited companies, including cases where the property was acquired through a share purchase agreement.
Our team can:
- Assess which lenders are suitable based on your timeline and ownership structure
- Navigate lender criteria around the 6-month ownership rules
- Help you exit bridging loans or specialist mortgages efficiently
Learn more about our limited company share purchase finance options or speak with us directly for advice on refinancing your newly acquired property company.
Whether the purchase was originally funded using a short-term bridging loan or a specialist mortgage, refinancing secures long-term funding on standard buy-to-let terms.
We provide a FREE assessment on all our services.
