MortgagesDec 16 2015

Scotland set for 3% buy-to-let tax rise

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Scotland set for 3% buy-to-let tax rise

Scotland’s finance secretary John Swinney has ruled out an increase in Scottish income tax when Holyrood gets more financial powers next year, but did announce a tax rise on second homes and buy-to-let properties.

The statements were made this afternoon (16 December) as part of his draft budget, which comes ahead of getting limited powers over income tax rates next April under the 2012 Scotland Act, passed under the previous UK coalition government.

Mr Swinney confirmed a three per cent surcharge on the full purchase price of all ‘additional properties’ from 1 April 2016.

For properties purchased for over £40,000 a 3 per cent surcharge will be levied, in addition to the Land and Buildings Transaction Tax already charged on the property.

Scotland had been the only part of the UK to which a 3 per cent stamp duty surcharge had not been introduced by chancellor George Osborne in his autumn statement.

As for the income tax statement, he said told the Scottish parliament: “I propose that the Scottish Rate of Income Tax will be set at 10p in the pound - the rate people pay this year will be the same rate that they will pay next year.

“I hope that from 2017/18 this parliament will have more flexibility in setting income tax rates. However, that will depend on reaching agreement on a new fiscal framework and final passage of the Scotland Bill.”

The Scotland Bill is currently being scrutinised by Westminster, but changes will not come into force until 2017 at the earliest.

The draft budget is normally presented in September, but it was delayed this year to take into account the Westminster spending review and Autumn Statement in November.