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Propertymark CEO Nathan Emerson has personally written to deputy first minister, John Swinney, about the Scottish government’s decision to increase the Additional Dwelling Supplement (ADS).
Even before the announcement to increase the ADS was made, the industry body was informed through a recent survey that 68% of letting agents said they had seen an increase in notices to sell. This was as a direct result of the Scottish government’s decision to cap rents under the Cost of Living (Tenant Protection) (Scotland) Act 2022.
Using this insight, Emerson stressed the increasing burdens placed on landlords in the private rented sector including:
- The withdrawal of tax relief on mortgage interest costs and replacement with a 20 per cent tax credit
- removal of the 10 per cent Wear and Tear Allowance for fully furnished properties being replaced with an at-cost relief
- Capital Gains Tax for rented property maintained at 28 per cent, when it was reduced to 18 per cent for other assets
- a rise in corporation tax from 19 per cent to 25 per cent from 2023
- and now higher rates of Land and Buildings Transaction Tax when purchasing additional property.
Mentioned within the letter, Emerson disclosed that one of Propertymark’s largest member agencies, who manage just over 3,000 tenancies across Scotland, issued 16 notices for rent arrears in 2021 alone and 66 due to landlords wishing to sell in 2022. Consequently, the membership body said it was concerned that on one hand the Scottish government is increasing costs to purchase a buy to let property but, on the other hand, capping rents in the private rented sector due to rising costs of living.
Supply of private rented property is the number one concern for Propertymark members, their tenants and landlords. Propertymark said that the lack of property is the root cause of rent increases and rising figures on social housing lists. With the private rented sector being a key solution to resolve the housing crisis if the Scottish Government continue with policies that disincentive landlords the industry body believes that this will only make the situation worse.
Emerson commented: “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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