The announcement by Derek Mackay, the Scottish Finance Secretary, in his Scottish Budget in December of a proposed increase in the Additional Dwelling Supplement from 25 January 2019 will impact on landlords wanting to enter the private rented sector with a small number of properties, or those buying a second home. However, Multiple Dwellings Relief, where six or more residential properties are bought in a single purchase, remains in place and this will leave larger acquisitions, and acquisitions of bigger mixed-use properties and estates, unaffected by the change.
Jamie Younger, Head of Saffery Champness’ Landed Estates Group, says:
“The proposal is to increase the additional dwellings supplement by 1% across every rate band so, for example, a lower priced additional property of between £145,000 and £250,000 with a Land and Buildings Transaction Tax rate of 5%, will now have an Additional Dwelling Supplement of 9% and a rise in the tax bill from £9,600 to £12,100.
“The measure, designed to bring more first-time buyers onto the housing ladder, may in fact dent the private rented sector for the smaller investor and one can recognise the consequences for second home buyers also.”