.avif)
-
17/12/25 3:30 pm
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Landlords in Scotland should brace themselves for a potential rise in property income tax, according to one financial expert.
Following the UK government’s decision to introduce a new, separate higher income tax regime for property income in England, Wales, and Northern Ireland from April 2027, accountancy firm Wbg has advised landlords to consider getting some advice.
“While the current Scottish income tax rates for rental income remain in place for now, the Scottish government may choose to mirror the UK-wide 2% increase in its own future budgets,” says tax director Gavin Brown (pictured).
Property income is currently taxed at the already higher Scottish rates of income tax, says Brown in Scottish Housing News, yet he suggests that a rise is possible, given the historic trend of higher rates of taxation in Scotland than elsewhere in the UK, and the impact that a tax increase in England can have on the Scottish Government’s budget.
“Landlords should consider the impact an additional 2% tax on property income could have on their portfolio and whether continued investment remains viable,” he says.
Scottish law firm Brodies explains that the UK rise in income tax on property income will lead to a reduction in Scotland’s block grant, however, Holyrood doesn’t have the power to create a corresponding change to offset this by increasing income tax on property income for Scottish taxpayers.
It says a decision will depend on discussions between the UK and Scottish Governments. “While it is hard to imagine that it won’t be introduced, it is still possible, and one expects that there may be practical issues to overcome such as in establishing the relevant baseline.
"Thankfully this won’t impact the upcoming Scottish budget on 13th January.”
Scottish property investors already pay an 8% Additional Dwelling Supplement which is significantly higher than the equivalents in England and Wales.
Tags:
.avif)
Comments