Propertymark is disappointed to see Land and Buildings Transaction Tax (LBTT) rates remain unchanged. The current property tax regime does not encourage people to move, right-size or relocate for work, while also deterring landlords from investing in much-needed rented homes. Furthermore, the Scottish Government misses out on the economic boost through increased transactions and spending in the wider economy.
LBTT continues to act as a barrier to people moving home and to investment in the private rented sector, which can help bring down the cost of renting. The Housing Investment Task Force was clear that property taxes should be reviewed to support housing supply and economic growth, yet this has not been meaningfully addressed. bring Additional levels of council tax also bring more disparity in pricing and costs across the property sector.
We look forward to the outcome of the current government review into LBTT, which includes exploring options for First-Time Buyer relief and the treatment of mixed-use transactions, non-residential leases, and the impact of the Additional Dwelling Supplement.
Business rates
Assessors review rateable values every 3 years to reflect changes in the property market. The next revaluation is in 2026. A new rateable value will apply to properties from 1 April 2026. The assessor will base this on an estimate of your property’s open market rental value on 1 April 2025 (the tone date).
The Small Business Bonus Scheme will continue with its existing rates and thresholds for a further three years. Hospitality, retail and leisure premises liable for the Basic or Intermediate Property Rate (those with a rateable value up to and including £100,000) will be eligible for 15% rate relief in 2026-27, capped at £110,000, or 100% relief if they are operating in island or designated remote areas.
For businesses losing eligibility for Small Business Bonus Scheme relief, rural relief, hospitality relief, or the previous Small Business Transitional Relief introduced for the 2023 revaluation cycle, the increased rates from 1 April 2026 will be phased in over three years. Small Business Transitional Relief will mean eligible ratepayers will pay 25% of any increase to their net bill in the first year (2026-27), 50% in the second year (2027-28) and 75% in the third year (2028-29).
Council Tax
New Council Tax bands will be introduced from 1 April 2028 for the most expensive residential properties with up-to-date valuations of over £1 million, while the wider Council Tax framework remains unchanged.
Income Tax
By raising the Basic and Intermediate rate thresholds by 7.4% (substantially more than inflation), the Scottish Government claims will maintain our longstanding principle that most Scottish taxpayers should pay less Income Tax than they would elsewhere in the UK. The Higher, Advanced and Top rate thresholds for Income Tax will be frozen.
Safe homes for all
Over the next four years, the Scottish Government will invest up to £4.9 billion to support the delivery of 36,000 affordable homes.
She also confirmed continued funding for Scotland’s Cladding Remediation Programme, which supports building owners and residents across Scotland to address the risks posed by dangerous cladding and to ensure safety for those affected.
