## Scottish Budget: No Increase in LBTT ADS Provides Some Relief

The Scottish Budget process, currently underway in the Scottish Parliament, has significant implications for landlords and tenants in Scotland’s private rented sector (PRS). One positive outcome so far is the decision not to increase the Land and Buildings Transaction Tax (LBTT) Additional Dwelling Supplement (ADS). This tax, levied on second homes and buy-to-let properties, has long been opposed by the Scottish Association of Landlords (SAL) for disincentivising investment without delivering clear benefits.

John Blackwood, chief executive of SAL, welcomed the government’s choice not to raise the ADS, describing it as “the best they can do with a bad policy.” While the ADS remains in place, its stability at current rates avoids further financial pressure on landlords at a time when investment in rental properties is crucial.

## Concerns Over Potential Tax Hikes on Rental Income

Despite the absence of an ADS increase, SAL members expressed disappointment that Finance Secretary Shona Robison has not ruled out following the UK Chancellor’s recent tax hike on property income. The Westminster government’s 2p increase on income tax for landlords has reportedly chilled the rental market in England, causing landlords to reconsider their investment priorities and reducing the number of homes available to rent.

Similar concerns are now emerging in Scotland. If the Scottish Government chooses to adopt a comparable tax increase through a legislative consent motion at Holyrood, it could create uncertainty for landlords and investors. Blackwood warned that such a move “would foster more uncertainty in Scotland’s PRS, adding more doubt in the minds of investors and making it more likely that they will leave the sector entirely.” This uncertainty comes at a particularly challenging time, as many landlords are already facing difficult decisions about their future involvement in the rental market.

## Missed Opportunity to Support Housing Supply

The Scottish housing crisis is widely acknowledged, with a pressing need for more affordable homes for individuals and families. SAL argues that attracting investment from landlords is essential to increasing housing supply. Tax hikes on rental income, however, risk deterring investors rather than encouraging them to expand their portfolios.

Blackwood emphasised that the Finance Secretary has an opportunity to help resolve the housing crisis by providing certainty to landlords. “If Shona Robison were to take the bold decision to say, unreservedly and without equivocation, that she will not increase tax on property income, she would let current and potential landlords know that their investments are secure and that now is a good time to grow their portfolios, therefore providing more homes to rent to those who need them.”

## SAL’s Ongoing Advocacy and Engagement

The Scottish Association of Landlords continues to engage with Scottish ministers, including the Finance Secretary and Housing Secretary, to advocate for policies that support the PRS. SAL also uses media platforms to communicate the sector’s perspective, with John Blackwood contributing a regular column to Property118 and hosting the Landlord Voice podcast.

Landlords and agents interested in SAL’s views on the budget and political developments are encouraged to follow the latest episodes of the Landlord Voice podcast, available on all major podcast platforms.

## What This Means for Landlords

For landlords in Scotland, the current budget signals no immediate increase in the LBTT ADS, which is a welcome relief. However, uncertainty remains regarding potential tax rises on rental income, which could affect profitability and investment decisions. Landlords should stay informed about ongoing budget developments and engage with landlord associations to ensure their interests are represented in policy discussions.

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### Suggested internal link anchors

– Land and Buildings Transaction Tax (LBTT)
– Additional Dwelling Supplement (ADS)
– Scottish private rented sector (PRS)
– Property income tax changes
– Scottish housing crisis
– Landlord investment incentives
– Scottish Association of Landlords (SAL)
– Landlord Voice podcast
– Housing supply and affordability
– Scottish Government housing policy
– Tax impact on landlords
– Rental market uncertainty

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TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/