Landlords have labelled the Scottish Budget a disappointment after the government failed to rule out future property income tax hikes.

Scottish Association of Landlords chief executive, John Blackwood (pictured), says the fact a 2p increase on income tax gained from property seen elsewhere in the UK may come into effect in 2027-28, subject to a legislative consent motion, will cause further uncertainty within Scotland’s PRS.

Finance Secretary Shona Robison also unveiled two new council tax bands for properties valued at over £1 million, which will come in by April 2028, and maintained current Land and Buildings Transaction Tax (LBTT) rates.

“While we do welcome that there will be no rise in the LBTT additional dwelling supplement, this budget still feels to us like a missed opportunity,” says Blackwood.

Increases

“Rather than continuing on this path, Shona Robison should say unreservedly that increases in tax on property income will not happen and give the sector some much-needed confidence to invest.”

Propertymark accused the Scottish government of failing to address the growing tax burden on housing. Timothy Douglas, head of policy and campaigns, says it’s surprising that it has yet again failed to tackle the housing emergency.

Barrier

Douglas believes Land and Buildings Transaction Tax continues to act as a barrier to people moving home and investment in the PRS, which can help bring down the cost of renting. “The Housing Investment Task Force was clear that property tax should be reviewed to support housing supply and economic growth, yet this has not been meaningfully addressed, and additional levels of council tax brings yet more disparity in pricing and costs across the property sector,” he adds.

“The current property tax regime does not encourage people to move, right size or relocate for work, while also deterring landlords from investing in much-needed rented homes.”

Housing charity Shelter welcomed Robison’s decision to increase spending on social housing by £34 million to build another 36,000 homes but says its falls 26,000 short of the government’s 2032 target.

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