Why nearly every new buy-to-let is bought through a limited company

Published 16 August 2026 · Written by the Lar founder

A Scottish property solicitor told us recently that 99.9% of the buyers coming across her desk for new buy-to-lets are purchasing through limited companies.

Not 60%. Not 80%. Nearly everyone.

That is a complete reversal of the market most Scottish landlords first bought into. Ten years ago the default was your personal name. Today it is a limited company set up specifically to hold property, the kind lenders and accountants call an SPV.

There are four reasons for the shift, and they are worth understanding. Together they explain why a portfolio you started in your personal name ten years ago is probably now running on a structure it was never designed for.

Section 24

Since 2020, higher-rate landlords who own property personally can no longer deduct mortgage interest from rental income before tax. Instead you get a 20% basic-rate credit after the fact.

For a higher-rate Scottish taxpayer paying 42% on rental income, that is a real cost, year after year.

Inside a limited company it does not exist. Interest is an ordinary expense, deducted before corporation tax.

Corporation Tax vs Scottish income tax

Corporation tax sits between 19% and 25% depending on profit. Scottish income tax on personal rental income climbs through bands up to 48%.

For a Scottish landlord above the higher-rate threshold, that gap is often wide enough to settle the question on its own.

The Additional Dwelling Supplement

Scotland charges ADS on top of LBTT when you buy an additional residential property. It applies whether you buy personally or through a company. The company route does not avoid it.

What has changed is the friction. Lenders, accountants and solicitors have all standardised around company purchases, so the extra cost and hassle that used to come with buying through a company have largely gone.

Inheritance and succession planning

Shares in a company are much easier to transfer, gift or restructure across a family than property held in your own name.

If you plan to hold your portfolio for a decade or two, that flexibility matters in its own right.

The operational consequence

Here is the part most coverage of this shift misses. Your companies are not just something your accountant thinks about at tax time. They are the structure your portfolio actually runs on.

Every property sits inside a specific entity. So does every mortgage, every tenancy deposit, every compliance certificate, every insurance policy, every bank account and every Companies House filing. When you look at “the portfolio”, you are really looking at several small businesses, each with its own deadlines and its own numbers.

Most landlord software was designed before this shift. It models properties first, then tries to bolt the companies on afterwards. Lar is built the other way round. The legal owner comes first, properties sit inside it, and everything Lar shows you respects who actually owns what.

Weighing up your next purchase? The companion guide, Limited company or personal name: five questions, sets out the conversation to have with your accountant.

Nothing in this guide is tax or legal advice. Rates and reliefs are as legislated at the time of writing. Talk to your accountant about your specific numbers.