One of the politicians backing a tax surcharge on the purchase of second homes and buy to lets has been put on the spot by a prominent agent.

David Alexander, chief executive of D J Alexander – a lettings agency in the Lomond Group – says the Scottish Government needs to make clear whether it is official policy that its recent increase in purchase tax surcharge to six per cent is actually intended to be a disincentive to property investment.

This month’s Scottish Government budget announced that the Additional Dwelling Supplement which is paid as part of Land and Buildings Transaction Tax on additional properties would rise from four per cent to six per cent with immediate effect.

But David Alexander has noted that a Green member of the Scottish Parliament – Ross Greer – has said on social media that “Raising the ADS will raise £34m for public services I hope it also acts as a disincentive to second/holiday home ownership, which hollows out rural communities and forces young people to move elsewhere.”

Alexander says there needs to be clarification over whether this is Greer’s personal view or official Scottish Government policy – especially as the Greens share power with the Scottish National Party in running the government north of the border.

He states that f this is government policy, then this is a clear indication that investment in the private rented sector is being actively discouraged by Scottish First Minister Nicola Sturgeon and her colleagues.

Alexander says: “I think the Scottish Government needs to be clear on this issue because there are hundreds of thousands of tenants living in the private rental sector whose homes are at risk if there is a direct policy to close this sector down through legislation. They owe it to the many institutional investors, private landlords, and others to indicate whether they are now actively discouraging all investment in Scotland so that they can decide whether they want to continue to invest in the property sector.

“Obviously if this is their political decision to close down the PRS for investment then it is only fair to give a five-to-ten-year indication of their policy with some guarantees about how they will manage the housing market in the future.”

He continues: “Given that the social housing waiting list has grown by nearly 10,000 in the last year alone to 144,900 there is very real demand which is not being met and the current policy toward the PRS is only damaging the hopes for tenants to find homes to live in.

“With Scottish Government policy keen to encourage immigration from the EU it is also questionable how these people will be housed. They will not be eligible for social housing and are unlikely to buy so there needs to be an answer as to where these people will be housed if not in the PRS.

“Equally the argument that removing second/holiday lets from the housing market is the intention begs the question as to where the people in these areas will work if there is no tourist trade. If this is to be a coherent policy, then there needs to be substantial job creation in areas which find their tourist trades suddenly depleted because there is no accommodation for visitors to stay in.”

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Letting Agent Today returns on Tuesday January 3 2023, and wishes all readers and their families a successful New Year and a well-deserved break!