Scottish Budget raises its version of Stamp Duty surcharge from 3% to 4%

The Scottish Government has proposed raising the levy on its version of the Stamp Duty surcharge, the Additional Dwelling Supplement, for purchases of additional properties, from 3% to 4%.

The tax is similar to the Stamp Duty rate south of the border and finance secretary David Mackay used his Budget to suggest that raising the surcharge would help first-time buyers.

He said: “As well as building more houses we are continuing to protect those buying their first home and progressing through the property market with our progressive land and buildings transaction tax.

“But for those purchasing additional properties I am proposing to increase the Additional Dwelling Supplement from 3% to 4%.”

If approved, the rate change will come into force on January 25.

David Alexander, managing director of property management firm DJ Alexander, said: “Although many will believe that those buying second properties can afford any level of tax that the Scottish Government wishes to impose on them, the truth is that increasing the rate of this tax at a time when many landlords are exiting the private rented sector market could have serious implications.

“Taxing them a 4% higher rate is unlikely to attract many property investors to Scotland who will be able to buy cheaper properties just across the border.

“Although Mackay undoubtedly sees this as a progressive tax on wealth, the results could be the loss of a substantial part of the private rented sector which is not being replaced in any meaningful way with social housing.

“Quite where he expects the people currently living in the PRS to live if more landlords leave the market and none come in to replace them is not explained.

“Making Scotland a less attractive place to invest in property is likely to result in lower government revenues rather than higher ones over the medium to long term.”

The UK Government has in recent times followed Scotland’s lead on several housing issues, including the tenant fee ban.


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  1. GPL

      ……and a Very UnMerry Christmas from the Scottish Government!

  2. Jireh Homes

    Another nail in the coffin for any BTL landlords in Scotland considering purchase of property, and further indication of the apparent drive to kill off the individual PRS business.  2019 does not bode well for landlords with older properties as we await publication of the Minimum Energy Performance Standards, which from all indications will be more onerous than those in place for England & Wales.


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