Latest news with #AdditionalDwellingSupplement
The Herald Scotland
2 hours ago
- Business
- The Herald Scotland
SNP reject proposal for new tax on second homes in hotspots
The tax, known as the Additional Dwelling Supplement, is paid by the buyer in addition to the Land and Buildings Transaction Tax, the standard levy on home purchases. Currently it is 8% of the cost of the property but the Greens wanted it raised to 16% in areas where there is a housing shortage arguing that it made sense for the government to be able to change the tax in a targeted way in particular regions rather than having to make any change nationwide. Their demand was made more than a year after the Scottish Government declared a housing emergency. READ MORE: Analysis: Scottish Tories face 'existential crisis' as Reform support grows Badenoch, Findlay and For Women Scotland to speak at Scots Tory conference Councillors fined for safety failings after disabled swimmer almost drowned The Greens pointed to some communities such as Lochranza on Arran where more than a third of houses are holiday homes and that the situation pushes up housing costs and often forces young people to move out of their own communities in search of an affordable place to live. Ross Greer, the Scottish Greens' finance spokesman, who tabled the amendment to legislation going through Holyrood, told The Herald last month that a high number of holiday homes in some areas reduced housing supply for local people as he urged ministers and opposition parties to back his proposal when it was voted on at stage two of the parliamentary process. But the Scottish Government and the other parties rejected his calls. A spokesman for social justice secretary Shirley-Anne Somerville said decisions over the ADS levels were made at the Scottish Budget. 'A number of amendments to the Additional Dwelling Supplement (ADS) were put forward at Stage 2 of the Housing (Scotland) Bill. The amendments were not passed. Decisions on the rates and bands of Land and Buildings Transaction Tax, including the ADS, are taken centrally as part of the Scottish Budget process," he said. Mr Greer hit back accusing his political opponents of protecting the wealthy. 'Parliament voted to declare a housing emergency in Scotland last year, but now every other party has just voted against Scottish Green proposals to stop the richest people buying up homes they don't need in the communities with the worst housing shortages," he said. 'My proposals to increase the Additional Dwelling Supplement in rent control zones and National Parks would only have affected those wealthy enough to even consider buying a second or holiday home. The end result would have been to make it easier for first time buyers in particular to get a home in the community they've grown up in. 'It cannot be right that in a number of communities across Scotland up to half of the properties are either second homes or holiday lets, despite a housing crisis which has led to 10,000 children currently living in temporary accommodation. The wealthy have once again been protected at the expense of families desperately waiting for homes.' Since the 2021 election, the Scottish Government has doubled the Additional Dwelling Supplement from 4% to 8% and given councils the power to double council tax on holiday homes after coming under pressure from the Scottish Greens. The Greens say the reforms have reduced the sale of holiday home purchases, with 2455 fewer second homes bought last year than in 2023, the largest decrease in a decade. ADS will also raise more than a quarter of a billion pounds for public services in the current financial year, according to the party. Thirteen of Scotland's 32 councils have declared a housing emergency, beginning with Argyll and Bute Council in June 2023, with the most recent being East Lothian Council in November last year. A national housing emergency was announced by the Scottish Government for the whole country in May 2024. Experts believe the main driver of the emergency include pressures on homelessness services, high levels of people in temporary accommodation and a lack of affordable homes compared to high waiting lists. Mr Ross's proposals on ADS were among more than 400 amendments to the Housing Bill which were debated by MSPs on Holyrood's local government, housing and planning committee. The legislation will be voted on later at its final parliamentary stage - stage three - in the Holyrood chamber and if passed would allow councils to create rent control areas where rent is capped to certain levels. Ministers have tabled an amendment proposing that rent rises are capped to the rate of inflation plus 1% to a maximum of 6%. They have also set out exemptions to this rule. The Scottish Government has also set a target date for local authorities to make market assessments and recommendations on whether or not to introduce a rent control area. The new date is May 31 2027. Many in the property sector are opposed to rent controls arguing the root of the problem of high housing costs is an insufficient number of homes to buy or rent. They argue rent controls may make the problem worse by prompting landlords to sell up.
Daily Record
4 days ago
- Business
- Daily Record
Dumfries and Galloway property market seeing increased activity and improved buyer confidence
The residential team at property consultants Galbraith handled 14 per cent more sales in the first three months of 2025 than the same quarter last year. A property consultancy claims there is improved buyer confidence and increased market activity in Dumfries and Galloway. The residential team at Galbraith handled 14 per cent more sales in the first three months of 2025 than the same quarter last year. Staff carried out 241 property viewings and 43 market appraisals, with transaction values ranging between £200,000 and £765,000. And the average percentage prices achieved were 3.5 per cent over the asking price. Partner and head of sales for Galbraith based in the Castle Douglas office, David Corrie, said: 'We have witnessed buyer confidence improving in the market due to falling interest rates and therefore mortgage rates coming down, allowing people to reengage and make a move. 'Spring time is a naturally active time of the year, spurred on by the favourable weather encouraging sellers to get their property ready for the summer market. 'There is an active second home market in Dumfries and Galloway and the increased Additional Dwelling Supplement (ADS), now up to eight per cent, is starting to have a ripple affect across the whole market. 'People are reassessing a second home purchase, particularly in the higher end of the market when increased levels of Land and Buildings Transaction Tax (LBTT) are also being paid, and consequently prices are being restricted. 'However, prices remain stable in the £200,000 to £400,000 market where properties with interesting features, a small portion of land or usable outbuildings remain in high demand. 'As such, there has been a number of successful sales completed at competitive closing dates where sensible pricing has been key. 'Buyers continue to be attracted to the area from the south as well as other parts of Scotland due to its accessibility from the central belt, the size and value for money and the semi-rural lifestyle on offer with stunning coastline and beautiful forest parks.'
Scotsman
05-05-2025
- Business
- Scotsman
Even the savviest of house-hunters can benefit from professional advice
Don't end up paying more tax than you need to, writes Kathryn Johnston Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Many people like to think of themselves as savvy house-hunters, but there really is no substitute for professional advice to avoid expensive pitfalls. After all, why pay more tax than you need to? There's nothing like a furore over tax to stoke an argument. To some, tax planning is an entirely sensible process to reduce liabilities, but to others it's a grey area that involves dodging your responsibilities. I suspect such polar opposite opinions will rarely find common ground. Advertisement Hide Ad Advertisement Hide Ad A Scottish politician has recently been accused by opponents of dodging tax by building a property portfolio in the north of England rather than Scotland, thus avoiding higher rates imposed by his own government. In fact, the current First Minister himself is on record as referring to altering tax affairs as technically possible, but morally wrong. Kathryn Johnston is a Private Client Associate, Murray Beith Murray But as Shakespeare's Hamlet might say, there's the rub. By shifting your property portfolio south of the border, you can sometimes save a considerable sum of money on the Additional Dwelling Supplement (ADS) and Land and Buildings Transaction Tax (LBTT). For all the apparent tax outrage this politician's planning has caused, it has also highlighted the differences between Scotland and England and the considerations buyers should, quite sensibly, take into account around second home ownership. And for that, whatever side of the divide you stand, professional advisers should be grateful that an important issue now has a higher profile. It really is vital to think hard about the location of your second home and crucially to take professional advice at the outset of your house hunting. ADS in Scotland currently sits at 8 per cent, having been bumped up from 6 per cent by the Scottish Government from December 2024. Indeed, it sat at what now seems a paltry 3 per cent up to 25 January 2019, so it's now much more of a material consideration for second home buyers. Its southern counterpart, known as Stamp Duty Surcharge, stands at 5 per cent. The rates at which LBTT is charged is also different and more punitive in Scotland for all purchase prices between £325,000 and £1.5 million. However, home ownership really is about location, location, location and it may well be that paying slightly more for your favoured spot is a price worth paying. Advertisement Hide Ad Advertisement Hide Ad But here is an unintended consequence – there's some leeway in the system to allow for the vagaries of the property market as buyers, who are simply looking to move house, often conclude a deal for a second home before they have managed to sell their own. However, any leeway was in short supply for one client who was looking to sell their original property, having purchased a new home first, within the allowable time frame – at that stage 18 months. One family member, however, became seriously ill which rendered the new home they'd purchased totally unsuitable. They then sold this second property and tried to reclaim the ADS paid, but this application was turned down by Revenue Scotland, which collects devolved taxes. The organisation, whilst sympathetic to our clients, confirmed that, unlike HMRC, it had no discretion to review cases and must simply apply the legislation. In short, if conditions are not met, there is no repayment. Moving house understandably often appears near the top of the charts of life's most stressful events. Taking professional advice as early as possible is one way to mitigate that – and it could also bring financial benefits.
The National
29-04-2025
- Politics
- The National
Holyrood bid lodged to let tenants withhold rent over repairs
An amendment to the Housing (Scotland) Bill, proposed by Scottish Greens MSP Ariane Burgess, would see renters able to withhold payments if landlords do not carry out repairs within 30 days of being notified about the issues. The amendment also looks to improve the tribunal process by ensuring landlords who act in bad faith would need to prove they have done enough to resolve the issue to unlock the withheld rent. READ MORE: Maggie Chapman speaks out after Tory bid to oust her over Supreme Court attack fails The Scottish Greens said their amendment would mean that concerns such as damp, mould, broken floorings, heating and hot water systems are repaired promptly and to a safe standard. The proposals have been backed by tenants' union Living Rent. Burgess said: 'My proposals will make it easier for renters to stand up to rogue landlords and to get vital repairs done quickly. Ariane Burgess 'At the moment, renters can do little except threaten to take their landlords to tribunals, which can be time consuming and stressful, and the burden of the tribunal falls on the renter. 'Renters should expect their homes to be maintained to the same standard as any other. But in some cases, there are landlords who simply feel it is okay to take rent and let their properties fester with damp, mould and serious problems that significantly impact health and wellbeing. 'While not all landlords let this happen, and many will be encouraged to keep up the good work, there are some bad faith actors who fail to maintain their properties. For those who rent these properties, it can be a miserable experience. 'People in this situation need more support and the power to make sure major repairs happen.' READ MORE: Kneecap break silence amid calls to prosecute and cut from TRNSMT line-up The Greens have also submitted a second amendment to the same bill which would mean that those purchasing a second or holiday home within a National Park have to pay an additional charge. The proposals, lodged by Ross Greer MSP, are aimed at tackling the housing crisis in Scotland's National Parks and the funds could be used for public services. Currently, anyone buying a second or holiday home anywhere in Scotland must pay a tax known as the Additional Dwelling Supplement. The Scottish Greens have called for this tax to be doubled for properties within National Parks, although this would have to be agreed by MSPs on an annual basis. According to the Greens, there are 2455 second homes in Loch Lomond and the Trossachs National Park, which is around 5% of all homes. In Cairngorms National Park, around 12% of all houses are second homes, reaching 20% in some communities. The average number of second homes across Scotland is around 0.9%. Ross Greer Greer said: 'Our National Parks are iconic and beautiful places, but the families who actually live there are being pushed out by second home owners. 'Young people in particular are too often forced to leave the communities they grew up in after being outbid by those wealthy enough to buy a second property. 'Too many properties are also used as cash cows for short-term lets while local people are priced out and businesses find it impossible to recruit staff because there is nowhere for them to live. 'The changes already delivered by Green MSPs have reduced the number of second and holiday homes bought each year, freeing up more properties for people who need a home to live in. Now we can build on this success and ensure that the communities within our National Parks are more than just holiday parks.'
Scotsman
28-04-2025
- Business
- Scotsman
Why investment in buy-to-let still holds appeal
While increased legislation and tighter regulations in recent years have impacted buy-to-let (BTL) landlords, residential investment is still proving popular and lucrative among long-term savers, according to experts and statistics. Sign up to our Scotsman Money newsletter, covering all you need to know to help manage your money. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... The latest Buy-to-Let Mortgage Market Update, published this month by UK Finance, which represents firms in banking and financial services, revealed that there were 52,648 new buy-to-let loans advanced in the UK in the fourth quarter of last year, worth £9.6 billion. This was up 39.2 per cent by number (47.2 per cent by value) compared with the same period in 2023. Buy-to-let investment | Supplied Focusing on Scotland, specialist property lender Together told Scotsman Money that between 2019 and the end of 2024, its BTL lending north of the Border increased by 50 per cent in volume and 177 per cent in value. Advertisement Hide Ad Advertisement Hide Ad Together added that post-Covid figures also look good with lending volumes increasing by 110 per cent between 2021 and the end of 2024, and values seeing a130 per cent growth. While Together's Scottish BTL lending dipped by2 per cent in value to£49.5 million between 2023 and 2024, it increased by 16 per cent in volume. Meanwhile, its average loan sizes in Scotland fell by 16 per cent to £149,871 last year. According to Together, a trend of an increased number of lower value loans suggests savvy Scottish investors were targeting less expensive properties than they had previously. But Together added that legislation and regulation could also explain the fall in total lending value. Changes included an increase from 4 per cent to 6 per cent in the Additional Dwelling Supplement (ADS), an added tax on top of the Land and Building Transaction Tax (LBTT) introduced at the end of 2022. The Scottish Government again increased this tax on rental and second homes to 8 per cent with immediate effect in its Budget last December, in a bid to encourage more first-time buyers into the housing market. Advertisement Hide Ad Advertisement Hide Ad Critics have claimed increased tax will make it more difficult and expensive for tenants remaining in the rental sector – who are likely to have to foot the bill through higher rents – as well as landlords. Together has called on the Scottish and UK governments to look into reforming their tax policies when it comes to landlords. lender also recently surveyed 1,000 BTL investors to uncover which UK city they think holds the most opportunity for investment. It found that 8 per cent of respondents believe Edinburgh has the greatest potential. Steven Clark | Supplied Steven Clark, corporate relationship director at Together, says: 'Edinburgh has always been resilient. In terms of property prices, it's a bit of a safe haven. There's continued investment into Edinburgh. Glasgow and across the Central Belt have also continued to do well.'He explains that mortgage availability is keeping the property market fairly strong, coupled with a shortage of good quality housing. Advertisement Hide Ad Advertisement Hide Ad Drilling down into the Together's survey findings in Scotland, in the next12 months some 13 per cent of landlords say they plan to buy more properties. Meanwhile, 15 per cent of landlords in Scotland will be reducing loan sizes and/or increasing their deposit size to reduce borrowing costs, and15 per cent say they will be refinancing their properties to support their other business objectives. However, due to cost and wider market pressures, 17 per cent of landlords in Scotland will be exiting the market altogether and15 per cent say they will be disposing of some investments .Steven says: 'Over the last few years, hurdles have been put in the way of small and medium-sized landlords who were, in effect, being squeezed out. Things like legislative changes and additional costs have meant that rather than BTL providing an additional source of income, it was actually costing them, so they started to dispose of properties.' As a result, he says, many properties are being pushed into the corporate landlord space. Steven adds that in contrast to landlords with smaller portfolios, corporate landlords will not have a personal relationship with tenants. He believes there is a misunderstanding of who landlords are, pointing out that many have small portfolios and should get more legislative protection. Advertisement Hide Ad Advertisement Hide Ad In Together's survey, landlords have identified opportunities in the coming months, with 30 per cent citing investment in eco/energy efficient homes – or houses with the potential to be made more energy efficient. Some 20 per cent referred to potential in such areas as social housing, and 20 per cent recognised opportunities in the private rental sector. Looking ahead, Steven says he will be surprised if there was a new influx of new landlords, but he expects to see people looking at different types of property ownership. For example, to meet demand for accommodation from students or social housing. He explains that many landlords choose to take a loan from specialist firm Together rather than a high street bank because of its flexible and fast approach. Advertisement Hide Ad Advertisement Hide Ad He says: 'You can't over-emphasise how important it is to have somebody working for you. From the outset we're trying to find a solution for people. It's about that old school way of lending and building relationships.' CASE STUDY Garry Wallace of Walmac Property, Dundee Garry Wallace | Supplied Garry Wallace is a former mechanic who has built up a property portfolio totalling 40 sites in Scotland worth £3.5 million since deciding to take up property investment full-time. He is now one of a quiet army of investors who track down empty properties, turning them into good-quality homes for rent. Garry uses short-term bridging finance from Together, usually secured against other properties, to buy in the Dundee, area as well as Fife and Glasgow. Once he's renovated the properties, he refinances them using a specialist mortgage broker to source longer-term BTL mortgages at a lower interest rate. Advertisement Hide Ad Advertisement Hide Ad Garry recalls: 'I bought my first flat when I was 21 because I wanted to get some of the savings I had working for me. It was only when my son came along in 2019 that we bought another site. Then we did some property training and got a coach. That soon catapulted us on a journey where we used private investors to fund deals and later started using bridging finance from Together to complete a lot more deals.' One method Garry, co-owner of Walmac Property, used to expand his BTL portfolio was securing finance against properties he owns that are 'unencumbered', meaning they have no mortgage against them. He says: 'I always keep unencumbered properties in my portfolio, so we can use companies like Together to provide a loan secured against them releasing funds to buy the next flat or house. 'In Dundee, we know the area, we know the sales prices and end values of property and we know how much it will cost us to do the refurbishments, therefore understanding what kind of profit we can make.' Advertisement Hide Ad Advertisement Hide Ad For example, Garry picked up a flat in the city for £39,000 and spent £22,000 on refurbishment costs. The renovation took about eight weeks and afterwards, the flat was valued at £80,000. He says: 'The flat will rent for £695 per month, which is really good, because it has been refurbished to a high spec. The average going rate is probably £525 to £650 for the area so the finish needs to be higher quality to command a higher rent.' Garry says there is a huge number of similar homes standing empty in Scotland and across the UK, with about 1,200 in Dundee alone. Despite the increased tax and legislation, Garry remains committed to investing in BTL. He says: 'Being a landlord has become more difficult and we have got to be on the ball with changing legislation.
