Property taxes in Scotland raised £753.6m in the past year, according to an analysis of recent statistics by DJ Alexander.
The estate agency reported that Scottish government revenues from the Land and Buildings Transaction Tax (LBTT) increased by 17.8% in 2025 compared with 2024, equating to £2,064,657 collected from homebuyers each day – £114.1m higher than the previous year.
Of the total, £235.7m came from the Additional Dwelling Supplement (ADS), charged to property investors, landlords and second-home buyers, representing 31.3% of overall receipts and £68.3m more than the previous year.
Most residential taxes were generated from properties sold for more than £325,001, which are subject to a 10% levy. 20,770 transactions above this threshold raised £431.2m, accounting for 83.3% of LBTT revenues from residential sales (excluding ADS), with an average tax per transaction of £20,760.
David Alexander, the chief executive officer of DJ Alexander Scotland, commented: “Another record year of property taxes with an astonishing increase of 17.8% in 12 months. This is partly due to the continuing buoyancy of the Scottish market maintaining strong sales and rising prices but also reflects the fact that much higher tax rates apply from a lower starting point in Scotland.”
“That over £2m a day is being collected from homebuyers is extraordinary and that so much of this tax is being levied on a relatively small proportion of the population.”
Alexander continued: “That 31.3% of this – a total of £235.7m – comes from landlords and second home buyers is further evidence of just how crucial this group is in maintaining high levels of taxable income for the Scottish Government. The appetite for buying Scottish homes remains undimmed for property investors, landlords and second homeowners despite ADS taxation being levied at 8%.”
“Despite these rising tax revenues, the liveliness of the Scottish market among homebuyers and investors is testament to their appreciation of the housing sector north of the border. However, it is worth remembering that the Institute for Fiscal Studies (IFS), along with many private investors who are desperate to invest in Scotland, stated that the current LBTT policy will, in the long term, reduce investment activity. At a time when there has never been a greater need for more private investment in housing in Scotland this level of taxation is unlikely to encourage financial growth in the long term.”
“There is also the issue of where this money is being spent. With three quarters of a billion pounds available in one year there is an opportunity to hypothecate this taxation and ensure that it is used to grow the wider housing sector through support for housebuilders, the private rented sector (PRS) and social housing.
“Despite the high taxation, Scotland undoubtedly remains a key location for property investors who see the buoyancy of the market, the high demand, and the potential for growth in the future as an incentive to invest. But if the tax position were relaxed and equivalent to the rest of the UK then who knows how much greater growth would be possible?”