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Agents on warpath over increasing additional property tax threat

Propertymark chief executive Nathan Emerson has personally written to  a leading politician about a tax threat to the rental sector. 

Emerson has written to Scottish Deputy First Minister John Swinney about the Scottish Government’s decision to increase the Land and Buildings Tax Additional Dwelling Supplement - the fee which is roughly equivalent to the additional homes stamp duty surcharge which applies in England.

Swinney recently increased the supplement to six per cent.


Even before the rise, some 68 per cent of letting agents in Scotland said they had seen an increase in notices to sell. This was as a direct result of another Scottish Government decision, this time to cap rents under the Cost of Living (Tenant Protection) (Scotland) Act 2022.

Using this insight, Emerson’s letter to Swinney stresses the increasing burdens placed on landlords in the private rented sector including the withdrawal of tax relief on mortgage interest costs and replacement with a 20 per cent tax credit, the removal of the 10 per cent Wear and Tear Allowance for fully furnished properties being replaced with an at-cost relief; Capital Gains Tax for rented property maintained at 28 per cent, when it was reduced to 18 per cent for other assets; a rise in corporation tax from 19 per cent to 25 per cent from 2023; and now higher rates of Scotland’s Land and Buildings Transaction Tax when purchasing additional property.

Emerson tells Swinney that one of Propertymark’s largest member agencies, managing just over 3,000 tenancies across Scotland, issued 16 notices for rent arrears in 2021 alone and 66 due to landlords wishing to sell in 2022. 


Consequently, the membership body said it was concerned that on one hand the Scottish Government is increasing costs to purchase a buy to let property but, on the other hand, capping rents in the private rented sector due to rising costs of living.

Supply of private rented property is the number one concern for Propertymark members, Emerson says, citing a lack of property as the root cause of rent increases and rising figures on social housing lists. 

“The Scottish Government needs to drastically improve the way that it values the private rented sector as it plays a huge role in housing the nation” says the Propertymark chief executive.

“If it continues with its flippant disregard, investment will only further decline, and rent will continue to rise. We ask the Scottish Government to urgently listen to our calls to revert on its decision to increase the Additional Dwelling Supplement and generally review taxes for landlords.”


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