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The National
14-07-2025
- Business
- The National
No need to wait for UK. Scotland can launch own form of wealth tax
Wealth inequality is increasing at an unimaginable rate and is currently substantially higher than income inequality. The rich are taking from all of us far more than they need and are giving back far less than what they are able to. This is a self-reinforcing problem, such as where people who were able to buy houses when they were cheap (perhaps during Thatcher's Right to Buy demolition of the social housing sector) became able to rent them out at ever increasing rates to people who can't now afford to save a deposit to buy a house because prices are rising faster than they can save due to the amount they have to spend on rent. READ MORE: Richard Murphy: Why the UK will not see economic growth under Rachel Reeves Even the Office for Budget Responsibility is now warning (as I did several years ago in my book All Of Our Futures) of the fiscal risks looming due to the number of people still privately renting when they retire and who will simultaneously be unable to afford to keep paying those rents and won't have any capital saved in their house to subsidise their inadequate state pensions. It's not for no reason that the British public is increasingly demanding that the UK Government brings in a wealth tax to rebalance our increasingly unstable economy. I will say there are good reasons for the UK to not bring in 'a wealth tax' – by which I mean a single annual payment calculated as a certain percentage of the value of all of the assets and possessions that you own. Professor Richard Murphy has articulated many of them well. It's hard to value those possessions, and easy to hide them. And there are other taxes that the UK could use – such as reforms to taxes on stocks, shares, pensions and capital gains – that would achieve much of the same result. Not that the UK Government is going to do any of that either, unless the pressure escalates to the point that the impossible becomes inevitable. UK Prime Minister Keir Starmer (Image: PA) Let's say, however, that the Scottish Government wants to take the first step. Could we do it here instead of waiting for the UK? The patterns of wealth ownership in Scotland are substantially different than in the rest of the UK, particularly London and the south-east of England. We don't have quite as many billionaires floating about the place. We also don't have as much wealth in stocks and shares – mostly because we don't have a stock exchange in Scotland any more. And our generally lower rates of pay mean comparatively lower rates of wealth stored in pensions. There are, however, two sectors in Scotland where wealth is substantially stored and which could be taxed using devolved tax powers: land and buildings. Scotland already has its Land and Buildings Transaction Tax, but despite the Scottish Greens seeking to apply what they called a 'mansion tax' to it, this would remain merely a surcharge on the transfer of assets, not a wealth tax applied to the holding of them. If you never bought another mansion, you'd never pay the mansion tax. READ MORE: Lesley Riddoch: The SNP must take up zonal pricing fight – why aren't they? Meanwhile, Council Tax is the most outdated and badly broken tax Scotland still insists on inflicting on the poor. The Scottish Government has stated it is not even going to think about reforming it until the end of this decade. This is completely unacceptable, especially as the solution is obvious. We need to scrap Council Tax and replace it with a tax based on a percentage of the present market value of the property. Common Weal argued that a rate of 0.63% would have been revenue neutral compared to Council Tax at the time we published the paper. That number could be recalculated now, but we estimated then that a 'revenue neutral' rate would actually mean a tax cut for eight out of 10 households as the burden of paying the tax would be placed more fairly on those who lived in the most expensive houses. We calculated that the 'break even' point then would have been a house worth something like £400,000. This is based on a flat rate of tax, too. We would argue that councils should have the power to add progressive rates on extremely valuable properties, such as £1 million-plus mansions or, as is the case with the current Council Tax, additional multipliers for multiple home ownership. This would immediately act as a wealth tax both on the most expensive properties but also on multiple property ownership. Unlike Council Tax, which is paid by occupants, our Property Tax would be paid by property owners and they could only pass on to their tenants the basic rate of tax. Landlords would have to pay any multiple ownership surcharges themselves. The second wealth store in Scotland, land, is probably the greatest store of almost untaxed wealth in the country. Many countries tax the ownership of land as a distinct tax from properties built on it, sometimes because of local democracy – for example, you might pay a land tax to your municipal government and property tax to your regional government. In Scotland there may be good reason to not do that but to simply extend the Property Tax to cover not just the land under and around your mansion but also the broader estate you own with it. Given that the two are often sold together, this would be much easier to put a price on than trying to calculate a separate Land Value Tax. We've estimated that doing this at the same flat rate as the Property Tax would bring in around £450 million a year in revenue – though this could be adjusted down to account for subsidies for small farms or up to better tax the 422 people who own half of Scotland. One of the major advantages of both of these taxes – one that negates objections from both the UK and Scottish Government whenever taxes on the wealth have been suggested – is that they completely bypass the idea that the rich will simply leave the country. Recent studies have shown that the idea of 'millionaire flight' basically isn't a thing. READ MORE: Ruth Wishart: Welsh Labour can call out their UK boss. Why can't the Scottish branch? It's not just a huge logistical hassle for comparatively little financial gain to pack everything up to go and live in a tax haven, even millionaires have friends and family as do their kids and tearing up those social bonds to save a bit of money just isn't worth it. However, this hasn't stopped the media pushing that line anyway. Even if it was true, the wealth people have locked up in Scottish land and housing can't move with them. The tax still needs to be paid by whoever owns them regardless of where they live (and many of the largest landowners in Scotland don't live here, so the point is particularly moot there). One of the biggest sources of instability in our current society and economy is wealth inequality. It urgently needs to be reined in and reversed. If the UK Government persists in refusing to do it then there is at least something the Scottish Government can do without having to wait for them. And if the current Scottish Government doesn't want to do it either well, there are elections next year. Maybe politicians could suggest who we should vote for who will?
The Herald Scotland
17-06-2025
- Business
- The Herald Scotland
Property chiefs call for more homes after Greens tax rise defeat
The tax, known as the Additional Dwelling Supplement (ADS), is paid by the buyer in addition to the Land and Buildings Transaction Tax, formerly the Stamp Duty Land 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 particular regions rather than having to make any change nationwide. READ MORE: Swinney programme failed to mention independence – so why all the talk now? SNP ministers to unveil £1 billion crackdown on public sector 'waste' What's behind the Scottish Government drive to cut public sector 'waste'? SNP ministers reject proposal for major tax rise on second homes in tourist hotspots Their demand was made more than a year after the Scottish Government declared a housing emergency with the Greens arguing the higher ADS rate would reduce the number of homes being bought for holiday use - allowing more properties to be bought by people living locally. In Scotland, councils have been able to impose up to double the council tax on second homes since April last year with the policy aimed at addressing housing availability by encouraging more homes to be used as primary residences. Critics say the policies only allow the wealthy to own second homes and prevent the less well off middle class from buying holiday properties. David Melhuish, director, the Scottish Property Federation, told The Herald the solution to a shortage of homes in some areas was to build more homes - not tax second buyers. The Scottish Property Federation want more homes to be built. (Image: PA) 'The ADS is already nearly double the equivalent rate for Stamp Duty Land Tax (SDLT) and this is complemented with additional charges for council tax on second homes. "The proportion of second homes has been reducing for some time in Scotland and is now around 1%, so while this will vary from one area to another, we do not think that it really is the main issue. "The reality is we have simply to deliver enough new homes, including affordable housing, across the country. This past year 19,000 were delivered across all tenures in Scotland when at least 25000 need to be completed year on year to make progress on addressing the housing emergency announced by the Parliament." Brian Moran, Scottish housing expert and Advisory Panel Member at Propertymark, the leading membership body for property agents, said the decision not to further raise the ADS would help investment. He added: "Propertymark has long said that the Scottish Government must review all costs and taxes impacting private landlords in order to understand the impact on rent levels and introduce pro-growth policies that support the need for housing up and down the country.' The Scottish Greens' Ross Greer, the party's finance spokesman, had put down the ADS proposal as an amendment to the Housing Bill, which is currently going through Holyrood. It was among more than 400 amendments to the legislation 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 measures may lead to fewer properties to rent by prompting landlords to sell up. Mr Melhuish added: "We think there are signs of progress on investor perspectives since the government amended the Housing Bill but this needs to be encouraged further in the remaining stages of the Bill and wider initiatives outlined in the Housing investment Task Force report published last week.' A spokesman for social justice secretary Shirley-Anne Somerville said last week decisions over 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. The Scottish Government has been approached for comment.
Scotsman
14-06-2025
- Business
- Scotsman
Why Americans want property in Scotland
The New Eidyn development at St James Quarter, Edinburgh could be just the thing for buyers from the US Alan Cumming on why so many people from across the Pond are buying homes over here 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... Scotland is seeing a steady rise in interest from American property buyers in 2025, driven by a mix of lifestyle appeal, relative affordability and strong cultural ties. Whether it's relocating, investing in a second home, or planning for retirement, more Americans are exploring the Scottish market as a viable and attractive option. At Rettie we have had an 18 per cent rise in our website traffic from the US in the last year alone. Rightmove recently reported that analysis of their data showed an increasing number of people from the US have been enquiring about homes for sale in the UK since the start of the year, and Scotland has replaced London as the most popular region for potential US movers to enquire about, with Edinburgh the most popular area for movers from the US. Advertisement Hide Ad Advertisement Hide Ad Cities like Edinburgh and Glasgow are becoming increasingly popular with overseas buyers — and it's easy to see why. They're straightforward to get around, packed with character and offer a great mix of culture, green space and everyday convenience. Edinburgh especially continues to stand out in European rankings, thanks to its strong infrastructure and vibrant lifestyle. For many Americans, these cities offer a smart and appealing alternative to the high costs and fast pace of major US cities. Scotland has replaced London as the most popular region for potential US movers to enquire about, says Alan Cumming Coastal towns such as North Berwick, St Andrews and Oban are also drawing interest. These areas offer a quieter pace of life, access to outdoor activities and a strong sense of community – all of which appeal to buyers looking for a change from the fast-paced urban environments they are used to. The availability of high-quality housing stock and scenic surroundings adds to the appeal. However, purchasing property in Scotland comes with its own set of financial considerations. One of the key factors American buyers are often unaware of is the Land and Buildings Transaction Tax (LBTT) – Scotland's version of stamp duty. This tax can be significantly higher than in other parts of the UK, particularly for properties over £400,000 and for second homes (where there is an additional surcharge of 8 per cent compared to 6 per cent down south). For buyers unfamiliar with the UK's devolved tax systems, this can be an unexpected cost that affects overall affordability. Despite this, Scottish property remains relatively good value in a US context and average prices are below those down south. Many buyers are also working with local agents and legal professionals who can help them navigate the process and understand the full cost of ownership, including taxes, legal fees and ongoing maintenance. Advertisement Hide Ad Advertisement Hide Ad What's clear is that American buyers are not just looking for a holiday home – they're looking for a long-term base that offers quality of life, stability and a sense of place. Scotland's combination of accessible cities, scenic towns and strong local identity makes it an increasingly attractive option. Americans aren't just visiting Scotland – they're settling in, drawn by charm, value and maybe just a wee dream of owning a castle (or two).
The Herald Scotland
13-06-2025
- Business
- The Herald Scotland
SNP reject proposal for tax rise 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.
The Herald Scotland
13-06-2025
- 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.
