Landlords urge new Minister to delay tax hike

The Scottish Association of Landlords (SAL) has urged the Scottish government to pause Additional Dwelling Supplement (ADS) for landlords to help ease the housing crisis.

The extra charge on Land and Buildings Transaction Tax - the Scots equivalent to stamp duty in England - is added to properties including second homes, rental properties, and holiday homes, and was raised from 6% to 8% last December.

SAL chief executive John Blackwood (main image) says a moratorium on the supplement for landlords would signal that the Scottish government is serious about encouraging investment in the private rented sector.

Undermined

“Investor confidence has been undermined and continues to be eroded,” he adds. “This move could encourage landlords to invest further and convince those considering leaving, to remain.

“Pausing the ADS would also be an effective way for our new Housing Minister to show that she values landlords and the role we can play in addressing Scotland’s housing challenges.”

Màiri McAllan was appointed as Housing Minister after the previous minister, Paul McLennan, asked to leave the government last week.

While giving evidence to Holyrood’s Social Justice and Social Security Committee, Blackwood (main image) explained that this targeted approach would boost Scotland’s housing supply and help to alleviate homelessness.

"I think there are  huge challenges for Scotland to ensure that we have a well-functioning private rented sector that works for everyone including tenants and landlords, and I am very keen to ensure that happens through the passage of the Housing (Scotland) Bill," he said .

Demand for rental property across Scotland continues to exceed supply and property experts report that the market is now splitting in two, with individual buy-to-let acquisitions slowing due to the increased cost of entry.

Meanwhile, because transactions involving six or more residential properties in a single sale still benefit from ADS relief, portfolio sales remain active because they also operate under a different tax structure.

Watch Blackwood's evidence in full