Propertymark slams Scotland’s BTL tax hike

Members of the Scottish Parliament (MSPs) have agreed the Scottish government’s £63 billion Budget for 2025-26.

The minority SNP-led administration secured backing from the Greens, Liberal Democrats and Alba, while Labour MSPs abstained during the final stage three vote.

The Conservatives opposed the financial blueprint, branding it as imposing the “heaviest tax burden in the history of devolution”.

A cornerstone of the Budget is its emphasis on housing, with more than £15 billion allocated to councils and a substantial increase in funds for affordable homes.

However, the decision to raise the Land and Buildings Transaction Tax (LBTT) surcharge on buy to let properties from 6% to 8% has led to PRS criticism.

Scotland’s landlord taxes

Propertymark’s head of policy and campaigns, Timothy Douglas, said: “Propertymark welcomes the investment in affordable housing and money for the Heat in Buildings programme to help more people install clean heat and energy efficiency measures in their homes.

“However, we do not agree with the Scottish government’s decision, through the Budget process, to increase taxes when purchasing buy to let property from 6% to 8%.”

He added: “The Scottish government’s Budget has failed to implement policies that can help meet the demand for private rented property and with Scotland’s landlord taxes now the highest in the UK, this will do nothing to tackle Scotland’s housing emergency and reduce rents for tenants.”

Blow to landlord investors

When the LBTT increase was announced in December, John Blackwood, the chief executive of the Scottish Association of Landlords, said: “Despite the Scottish Government admitting Scotland is in the midst of a housing emergency, they now go and deal another blow to landlord investors by increasing Additional Dwelling Supplement (ADS) from 6% to 8%.

“Instead of encouraging new investment, they seem to be going out of their way to deter investors from buying from the many landlords who have had enough and are opting to sell.

“The Scottish government is clearly signalling to the market they are not interested in new investment in Scotland.”

Investment in affordable housing

Finance Secretary Shona Robison said the budget had been developed through ‘engagement and negotiation’ and added: “It includes record NHS investment, social security spending to put money in the pockets of low-income families and action to effectively scrap the two-child benefit cap next year.

“We are delivering a universal winter heating payment for the elderly, providing record funding for local government and increasing investment in affordable housing.”

Scottish Conservative finance spokesman Craig Hoy criticised the government proposals, saying public services in Scotland are ‘failing’ and taxes are ‘too high’.