I am currently researching on UK property development and buying.

An interesting website for that is the https://beta.companieshouse.gov.uk/website.

While browsing through it, it became apparent to me that many companies related to real estate are rather a legal vehicle for an individual to buy a property.

Additionally, it appears that often a person creates one company per property it buys (see for instance this page : https://beta.companieshouse.gov.uk/officers/Jff76xmXFPDiRW40Yv8VvngLz_Q/appointments ).

Why is this a common practice amongst property developers / investors?

  • 1
    In countries with a real estate transfer tax (e.g. Germany) this construction is used to avoid taxation. Only shares of the company owning the property are sold, not the property itself.
    – lejonet
    Commented Aug 7, 2019 at 23:38

1 Answer 1


My best guess would be:


If someone sues "you" for something that happens at a certain property, they're really suing the company which owns that property.

In the event that the company loses the lawsuit, you liquidate that property to pay off the judgement while retaining all of your other property.

  • 3
    Or, more explicitly, isolation of liability. Any liabilities resulting from something going wrong with one property should not drag other properties into the mix. (IANAL warning: whether this is always effective, or whether certain situations could "pierce" the protection offered by a holding company would be a question for a qualified lawyer).
    – TripeHound
    Commented Aug 7, 2019 at 9:02

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