The Scottish Budget was announced last week and delivered more bad news for property landlords. When buying a second property in Scotland, the Scottish Government plans to increase the tax payable which is a blow for landlords and holiday home buyers. Additional Dwelling Supplement (ADS) is a surcharge paid on a second home and is rising from 3% to 4% from 25 January 2019.
ADS was introduced in April 2016 and is payable when you are buying a second residential property (in addition to your main home). It means that buyers purchasing second homes or buy-to-let property pay an additional 3% as well as the regular Land and Buildings Transaction tax rates. The change means that a buy-to-let landlord purchasing a home for £250,000 will see their tax bill rise from £9,600 to £12,100.
In East Lothian, and North Berwick in particular, we have seen an increase in holiday home property transactions. Known as the Biarritz of the North, people flock there in large numbers during the holiday season. Full time residents may well be in favour of this tax % rise, to address the number of dormant properties during off-peak times. This may also steady the market, making properties more accessible for families who wish to purchase their permanent home in North Berwick.
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The information and opinions contained in this blog are for information only. They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice. Before acting on any of the information contained in this blog, please seek specific advice from Gilson Gray.