28% of Scotland’s property taxes come from investors and second home buyers

28% of Scotland’s property taxes come from investors and second home buyers

0:03 AM, 26th May 2023, About 11 months ago

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Investors and second home buyers account for more than a quarter of all Scotland’s property taxes paid over the past year, research reveals.

DJ Alexander Ltd, Scotland’s largest estate and letting agents, says these buyers have contributed £179.1m in additional dwelling supplement (ADS) between May 2022 and April 2023.

That’s nearly 28% of the £642.4m in tax collected for the year.

And the firm says, the last two months have seen the highest ever amounts of ADS on second homes being collected since the tax was unveiled in April 2016.

‘Regard Scotland as an attractive place to invest in’

The firm’s chief executive, David Alexander, said: “These figures are remarkable and indicate that landlords and second homeowners regard Scotland as an attractive place to invest in.

“While these figures relate to both investors and those wanting to own another home, my suspicion is that the majority of these buyers are landlords who rightly recognise that Scotland is an area with enormous demand for property rentals and extremely limited supply.

“The result of this over the last 10 months or so has been the largest rent rises in the UK.”

37.5% of all residential Land and Building Transaction Tax

The figures show that in March, £17.8m was collected – which is 37.5% of all residential Land and Building Transaction Tax (LBTT) collected that month.

In April, £17.3m was collected, representing 37.1% of the total tax take.

Mr Alexander said: “It seems the increased rate of the additional dwelling supplement from four to six per cent hasn’t thrown a spanner in the works, either.

“This is likely because the demand in the private rented sector (PRS) is at an all-time high.”

‘People want to live in Scotland’

He added: “People want to live in Scotland, especially in Edinburgh and Glasgow, which have seen enormous levels of demand over the past few years.

“I believe that landlords and investors can continue to produce a good return from the PRS as people want to live in Scotland.

“In particular, they want to rent in Edinburgh and Glasgow which have seen enormous levels of demand over the last few years, and I believe that this is likely to continue for some considerable time to come.”


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