Housebuilding to suffer largest cuts
In our pre-budget scrutiny, Propertymark called for an increase in the number of homes for people to buy and rent as well as support for the move towards decarbonisation and help to reduce energy bills in people’s homes.
Whilst the budget for 2024-25 includes funding for a supply programme to deliver more social housing, support older people to heat their homes and additional funding to end homelessness, overall housing spending has been cut.
- The total amount spent will go down from £738.3m in 2023-24 to £533.2m in 2024-25
- The biggest cut will be felt in housebuilding, with a drop of nearly £190m in funding
- Funds for fuel poverty and housing quality are also being drastically cut, from £21.8m to £1.7m
Council tax will not rise
Rates will be frozen for taxpayers, with councils compensated by the Scottish Government for an above-inflation 5% increase, taking local government funding to a new record high according to Robison.
However, some local authorities had contemplated a bigger rise or had anticipated gaining income from proposals to increase the council tax bills of those in the most expensive homes.
Property rates frozen
The poundage on the basic property rates will be frozen, protecting businesses with a rateable value up to and including £51,000 from the impact of inflation. That will save rate payers £37m compared to an inflationary increase, the Finance Secretary stated.
This will ensure that Scotland has the lowest rate for all but the largest properties for the sixth year in a row. The Small Business Bonus Scheme will also be maintained ensuring that 100,000 properties are taken out of rates altogether.
Additional income tax band
Whilst rates will stay the same for the existing bands, a new 45% income tax rate will be introduced for those earning between £75,000 and £125,140.
There will now be six income tax bands in Scotland:
- Starter rate (19%) £12,571 - £14,876
- Basic rate (20%) £14,877 - £26,561
- Intermediate rate (21%) £26,562 - £43,662
- Higher rate (42%) £43,663 - £75,000
- Advanced rate (45%) £75,001 - £125,140
- Top rate (48%) Above £125,140
The Scottish Fiscal Commission estimates that overall income tax will raise £18.8 billion in 2024-25.
There is a huge demand crisis in the private rented sector that the Scottish Government is failing to address. Scotland remains the most expensive place to invest in the private rented sector across the UK and we need to see more support through grant funding to help agents and their landlords to improve the energy efficiency of homes.
The Cost-of-Living legislation has raised costs for renters and it’s now imperative that the Scottish Government carry out a review of all taxes impacting private landlords and the wider property sector in order to introduce policies that help meet the demand from renters and tackle the housing emergency.
