Investors And Second Home Buyers Big Tax Earner
Investors and second home buyers contributed over a quarter of all property taxes in the last year according to a property firm.
DJ Alexander Ltd, the largest lettings agency in Scotland and part of the Lomond Group, says that the latest statistics on Land and Building Transaction Tax – Scotland’s equivalent of stamp duty – reveals that buyers paying the additional dwelling supplement which is liable on second homes contributed £179.1m between May 2022 and April 2023.
This represented 27.9 per cent of the £642.4m collected in tax for the year.
The latest two months recorded the two highest ever amounts of ADS collected since the tax was initiated in April 2016.
The figure for March was £17.8m which was 37.5 per cent of all residential LBTT collected that month and for April it was £17.3m which represented 37.1 per cent of the total tax take.
David Alexander, chief executive of DJ Alexander Ltd, comments: “These figures are remarkable and indicate that landlords and second homeowners regard Scotland as an attractive place to invest in.
“While these figures relate to both investors and second home buyers my suspicion is that the majority of these buyers are landlords who rightly recognise that Scotland is an area with enormous demand for property rentals and extremely limited supply.
“The result of this over the last 10 months or so has been the largest rent rises in the UK.”
“Given that the last two months have seen the highest ever amount of additional dwelling supplement it is a surprise that the increased rate of this tax from four to six per cent does not seem to have had a dampening effect on the market. I am sure that this is because demand in the private rented sector is at a record level.”
If you have any comments, please email the author of this article and click on the link above