There was some good news for landlords and property buyers for Scotland in this week’s Budget with only previously announced changes come into effect.
A new stamp duty surcharge of 2% for non-UK resident investors, effective from April 1 will not apply to Scottish residential properties, unless the Scottish Government decides to adopt the measure.
The Chancellor Rishi Sunak made no mention of a proposed raising of the stamp duty threshold to £500,000, floated by his predecessor Sajid Javid for property buyers south of the border.
While this would have been welcome news for landlords and investors in England and Wales, there were concerns in Scotland at the creation of a two-tier system that could have driven investment south.
For corporate investors, corporation tax remains frozen at 19%, which is further welcome news.
However, there were also some added burdens on the sector with the announcement of more investment into investigating tax mitigation structures that allow some people to avoid tax.
In addition, from April 5, capital gains tax will be payable within 30 days of a property being sold, making it critical to ensure that you keep great records of the original purchase and associated costs.
April will also see the full implementation of Section 24 mortgage interest changes that will reduce the amount upon which landlords can claim tax relief.
Gregor Cope, a Director of Scottish Property Centre Shawlands, said that while the Budget could have been worse for the sector, there was little to cheer.
He said: “Private landlords provide a substantial and worthwhile value to society investing in homes for people to live in.
“This service is particularly crucial in central Scotland where there has been an historic underinvestment in social housing leading to a chronic shortage of housing stock both to buy and rent.
“While the Budget was not as punitive as some people predicted it’s time governments of all colours acknowledged the benefits of a thriving private rented sector by introducing a fairer tax treatment.
He added: “The interest rate cut from 0.75% to 0.25% and a budget without any new tax rises for UK based landlords is, of course, to be welcomed.”
For more information on property investment opportunities in your area, call your local Scottish Property Centre branch or visit www.scottishpropertycentre.net