Scotland’s Budget has increased the equivalent of stamp duty on buy to lets and other additional homes to a hefty 8%.

It was 6% before yesterday evening’s announcement.

The news has prompted a Propertymark spokesperson to say: ““With huge demand for private rented property and long-term rent control measures contained in the Housing Bill, the Scottish Government’s decision to raise Additional Dwelling Supplement under Land and Buildings Transaction Tax from six to eight per cent is quite simply wrong and out of touch with the housing needs of Scotland. 

“The decision leaves Scotland as the most expensive place in the UK to rent out a property and will further discourage new landlords to take on much needed private rented property to let.

“Whilst Propertymark has long called for a review of Land and Buildings Transaction Tax, and the Scottish Government has now committed to do this through the Budget, ultimately with between tenancy rent caps planned and impending minimum energy efficiency rules for private rented property, raising yet more taxes on the private rented sector will do nothing to tackle the housing emergency and only raise rents further and put the burden of these costs on tenants.”

In other measures, the basic and intermediate income tax bands in Scotland will increase by 3.5%. This means people’s earnings will be taxed at a lower rate than under the current system.

There will be a freeze on thresholds for higher earners in Scotland.

Scotland has six income tax bands, in contrast to England, Wales and Northern Ireland where there are just three.

Sarah Coles, head of personal finance at business consultancy Hargreaves Lansdown, says: “Yet again, higher earners are stepping in to fill the government’s coffers in Scotland. Taxpayers enjoy key additional benefits north of the border – not least free prescriptions, a universal Winter Fuel Payment for pensioners from next year and no tuition fees for Scottish students studying in Scotland. However, they’re picking up the bill for this with higher taxes – particularly among those who earn more.

“Already, around 1.5 million people who earn more than £28,850 pay more income tax than they would elsewhere in the UK. The changes today will ease the tax burden for those further down the income spectrum, because by increasing the thresholds, it will protect them from the horrors of fiscal drag, which pushes more people over tax thresholds with each pay rise.” 

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