The Scottish Government’s 2025–26 Programme for Government commits to implementing the recommendations of the Housing Investment Taskforce, which calls for a full review of the role taxation plays in supporting housing investment.
We believe this review should be brought forward urgently and delivered alongside the proposed changes for property investment funds. Taking a piecemeal approach risks creating an uneven playing field where large institutional funds enjoy tax advantages while individual landlords shoulder ever-increasing burdens. A comprehensive review would allow Scotland to create a level playing field that supports all investors—large and small.
View the LBTT property investment fund consultation →
The impact of the Additional Dwelling Supplement
One of the biggest barriers to investment in Scotland’s private rented sector (PRS) is the Additional Dwelling Supplement (ADS). Introduced in 2016 at 3%, ADS has since risen to 8% as of December 2024. Unlike investment funds, which can avoid ADS in some circumstances, individual landlords are left carrying a growing share of the tax burden. This not only discourages landlords from expanding portfolios but also pushes up costs for renters.
We believe the Scottish Government should reduce the ADS rate overall or remove it entirely for properties purchased for the purpose of long-term letting.
Such changes would encourage greater investment in the PRS and improve housing supply for tenants.
Campaigning for fairer taxation
Propertymark has consistently highlighted the negative impact of tax changes on the PRS across the UK. Our 2024 position paper on tax set out the cumulative effect of rising costs, mortgage tax relief restrictions, and additional property surcharges on landlords and tenants. We have also repeatedly stressed that without reform, investment will stagnate, and rents will continue to rise.
We stand ready to work with Scottish Government officials to shape a fairer tax framework that supports all investors—large and small—and ensures Scotland can deliver the homes it urgently needs.
