Propertymark calls for 6% Additional Dwelling Supplement reversal

In a bid to highlight the increasing burden on landlords in Scotland’s private rented sector (PRS), Propertymark is calling on the Scottish Government to reverse its recent 6% Additional Dwelling Supplement (ADS).

This is an extra charge that was imposed on additional residential property purchases after 16 December 2022 in Scotland.

Now, Propertymark’s chief executive Nathan Emerson has written to John Swinney MSP, the Deputy First Minister, about the Scottish Government’s decision to increase the ADS.

Even before the announcement to increase the ADS was made, the industry body carried out a survey and found that 68% of letting agents said they had seen an increase in notices to sell.

This was a direct result of the Scottish Government’s decision to cap rents under the Cost of Living (Tenant Protection) (Scotland) Act 2022.

Increasing burdens placed on landlords in the private rented sector

In his letter, Mr Emerson stresses that the increasing burdens placed on landlords in the private rented sector include:

• The withdrawal of tax relief on mortgage interest costs and replacement with a 20% tax credit
• Removal of the 10% Wear and Tear Allowance for fully furnished properties being replaced with an at-cost relief
• Capital Gains Tax for rented property was maintained at 28% when it was reduced to 18% for other assets
• A rise in corporation tax from 19% to 25% from 2023
• Higher rates of Land and Buildings Transaction Tax when purchasing an additional property.

Mr Emerson also highlights that one of Propertymark’s largest member agencies, which manage more than 3,000 tenancies across Scotland, issued 16 notices for rent arrears in 2021 – and 66 were due to landlords wishing to sell in 2022.

Scottish Government is increasing costs to purchase a buy to let property

Propertymark says it is concerned that the Scottish Government is increasing costs to purchase a buy to let property and also capping rents due to rising costs of living.

The supply of private rented property is the number one concern for Propertymark members, their tenants and landlords.

But the organisation says that the lack of property is the root cause of rent increases and rising numbers on social housing lists.

They say that the private rented sector is a key solution to resolving the housing crisis but not if the Scottish Government continues with policies that disincentivise landlords that will only make the situation worse.

‘The private rented sector plays a huge role in housing ‘

Mr Emerson said: “The Scottish Government needs to drastically improve the way that it values the private rented sector as it plays a huge role in housing the nation.

“If it continues with its flippant disregard, investment will only further decline, and rent will continue to rise.

“We ask the Scottish Government to urgently listen to our calls to revert on its decision to increase the Additional Dwelling Supplement and generally review taxes for landlords.”

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